IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG No. 18 of 1978 GENERAL DIVISION BRIAN RONALD ADAMSON Vv. WEST PERTH FOOTBALL CLUB INCORPORATED, WESTERN AUSTRALIAN NATIONAL FOOTBALL LEAGUE INCORPORATED and SOUTH AUSTRALIAN FOOTBALL LEAGUE INCORPORATED Coram : Northrop J. 26 November, 1979 MELBOURNE. CATCHWORDS Trade Practices ~ Australian Rules Football - clearance and permit regulations - effect on players and clubs - refusal to grant clearance - provision of a contract arrangement or understanding having the purpose or effect of substantially lessening competition in a market for services ~ alternatively, restraint of trade. Common law doctrine of restraint of trade - Jurisdiction of Federal Court - implied incidental jurisdiction; associated matters jurisdiction; jurisdiction pursuant to section 22, Federal Court of Australia Act. Trade Practices Act 1974 ss. 45, 80 and 86. Federal Court of Australia Act 1976 ss. 5,19,21,22,23 and 32. The Constitution ss.51(xxxix); 75,76,77(i), (ii). Judiciary Act 1903 ss. 2,30(a),33 and 40A, Acts Interpretation Act 1901 s.15A. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG No. 18 of 1978 GENERAL DIVISION BETWEEN: BRIAN RONALD ADAMSON Applicant and WEST PERTH FOOTBALL CLUB INCORPORATED, WESTERN AUSTRALIAN NATIONAL FOOTBALL LEAGUE INCORPORATED and SOUTH AUSTRALIAN FOOTBALL LEAGUE INCORPORATED Respondents ORDER. . JUDGE MAKING ORDER: Northrop J. DATE OF ORDER: 26 November 1979. WHERE MADE: ° Melbourne. THE COURT: 1. Declares that the rules and regulations of respondents, the Western Australian National Football League, Incorporated, West Perth Football Club, Incorporated, and the South Australian National Football League, Incorporated, insofar as they reguire the applicant, Brian Ronald Adamson, to obtain a clearance from the West Perth Football Club in order to be entitled to apply for a permit to play football with Norwood Football Club, Incorporated, are of no effect as being in restraint of trade. 2. Declares that the rules and regulations of the respondent the South Australian National League, Incorporated, insofar as they require the applicant, Brian Ronald Adamson, to obtain a permit in order to play football with Norwood Football Club, Incorporated, are of no effect as being in restraint of trade. St Cet ee A 2. Declares that the rules and regulations of the respondent the South Australian National Football League, Incorporated, insofar as they render Norwood Football Club, Incorporated, liable to a penalty in the event it includes the applicant Brian Ronald Adamson as a member of a team in a football match organised by that League are of no effect as being in restraint of trade. Orders that the respondents pay the applicant's costs including all costs reserved. Orders that all parties have liberty to apply to the Court as they may be advised, eeIN THE FEDERAL COURT OF AUSTRALIA ' VICTORIA DISTRICT REGISTRY VG No. 18 of 1978 I GENERAL DIVISION - BETWEEN: BRIAN RONALD ADAMSON Applicant and WEST PERTH FOOTBALL CLUB INCORPORATED, WESTERN AUSTRALIAN NATIONAL FOOTBALL LEAGUE INCORPORATED and SOUTH AUSTRALIAN FOOTBALL LEAGUE INCORPORATED Respondents NORTHROP J. REASONS FOR JUDGMENT 26 November, 1979. On 19 May 1978 Brian Ronald Adamson, hereinafter called "the applicant", obtained in Melbourne an order in the Federal Court of Australia calling upon the respondents Western Australian National Football League (Incorporated), hereinafter called the "Western Australian League", West Perth Football Club (Incorporated), hereinafter called "West Perth", and the South Australian National Football 1 League (Incorporated), hereinafter called "the South Australian League", to show cause before the Court at Perth on 14 June 1978 why injunctions should not be made restraining t them from engaging in conduct specified in the order. The applicant was and 1s a professional player of the code of football known as Australian rules football and had played mw, me ee ee mee ee -- 0 eee we eee —_— err * 2. as a member of the West Perth team in the football competition organised by the Western Australian League. He desired to move to Adelaide and to play football as a member of the team of Norwood Football Club (Incorporated), hereinafter called "Norwood", inthe football competition organised by the South Australian League. The applicant was unable to obtain the necessary clearance and permit to play for Norwood and if Norwood had included him in its team, Norwood would have been in danger of losing any premiership points which otherwise it would have received if it had won the match in which the applicant had participated. The applicant sought the injunctions pursuant to s.80 Trade Practices Act, 1974, as amended, hereinafter called "the Act" and/or common law or equity. The substantive basis for the claim pursuant to the Act was that the respondents were trading corporations engaging in conduct that constituted a contravention of s.45 of the Act. 'The substantive basis of the claim pursuant to common law or equity was that certain rules and regulations of the respondents which were binding upon the applicant and the respondent imposed upon the applicant a restraint of trade which was unreasonable and unjustified, see Buckley v. Tutty (1971) 125 C.L.R. 353. On 6 June 1978, the Chief Justice of the High Court of Australia, on the application of the Western Australian League and West Perth, granted an order nisi calling upon the Judges of the Federal Court anu the applicant to show cause why they should not be prohibited from proceeding with the hearing of the application for the injunctions. The order nisi included an order ;: "That until the disposal of the order nisi all proceedings in the matter in the Federal. Court of Australza be stayed." As a result, the Federal Court adjourned the hearing of the Matter sine die, The High Court, at Sydney, heard argument on the order nisi for prohibition on 14 and 15 June 1978. The issues raised in those proceedings related to whether the Federal Court had jurisdiction to hear and determine the en neta elimi aahaenemnennttdhn me nanan erat anton. tan says tn etm i Suh nh AS eR A tl A a aL Ae se mh a te rn deat mt Abt Soee = be ene meta e lm pe 3. matter pending in the Federal Court. The substantive question argued was whether the respondents or any of them or any of the associated football leagues, the National Football League of Australia hereinafter called "the National League", or the Victorian Football League, were trading corporations within the meaning of the Act and within s. 51 (xx) of the Constitution. At the conclusion of the hearing of the proceedings before it, the High Court reserved its decision but lifted the order staying the proceedings pending in the Federal Court. On 21, 22 and 23 June 1978 at Perth, the Federal Court heard applications for interim injunctions pursuant to s.80 of the Act. In the course of that hearing it became apparent that they involved matters arising under the Constitution or involving its interpretation and the Federal Court directed that notice of the cause specifying the nature of those matters be given to the Attorneys-General of the Commonwealth and of the States of Western Australia, South Australia and Victoria, see $.78B Judiciary Act 1903, as amended, but under s.78B(5) the Court proceeded to hear and determine the application for the granting of urgent relief of an interlocutory nature. One of the matters specified in the notices involved the nature and extent of the jurisdiction conferred by s.32 Federal Court of Australia Act 1976, as amended. Sub-section (1) of that section provides as follows: "32.(1) To the extent that the Constitution pemmits, jurisdiction 1s conferred on the Court in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Court is invoked." At the conclusion of the hearing the Court refused to grant interlocutory relief and adjourned the further hearing sine die. In giving its reasons for judgment, the Court, in relation to the jurisdiction conferred by s.32(1) Federal Court of Australia Act and insofar as the applicant sought relief pursuant to common law or equity said : "This question is a matter of utmost importance both to the Commonwealth and to the various " 4, States. It raises the question in a very stark form of the extent of the power of the Federal Government to grant jurisdiction to Federal Courts, jurisdiction which 1n the nomml course would go to the State Courts - the common law courts. Having regard to the constitutional problems involved and the absence of any submissions from the State Attormeys-General and the Commonwealth Attorey~-General, I cannot form the required degree of satisfaction to exercise the jurisdiction in that associated jurisdictim." On 30 June 1978, at Sydney, a Full Court of the Federal Court of Australia allowed an appeal against the order refusing interlocutory relief but based its decision on facts and arguments not put before the Court constituted by a single Judge, see Adamson v. West Australian National Football League (Inc.) (1978) 20 A.L.R. 191. On 27 February 1979 the High Court discharged the order nisi for the writ of prohibition holding that the respondents were trading corporations within the meaning of the Constitution and the Act and that the Federal Court had jurisdiction to hear and determine the application before it insofar as the application was made pursuant to the Act, R. v. Judges of the Federal Court of Australia and Adamson ex parte West Australian National Football League (Inc.) (1979) 23 A.L.R. 439. The matter came on for hearing before the Federal Court at Adelaide on 7 May 1979, when a number of procedural matters were debated. In the result, the further hearing of the Matter was adjourned to 23 May 1979 and the applicant was directed to give notice to the Attorneys~General of the Commonwealth and of the States of Western Australia, South Australia and Victoria of the tume and place when the matter would be heard, reminding them of the notices already given under s.78B Judiciary Act and giving notice of a further matter being the nature of the jurisdiction, if any, conferred upon the Federal Court by s.22 Federal Court of Australia Act. On the resumed hearing at Adelaide on 23 May 1979, \ ree ann te Fe ee ee ee re 5. senior counsel appeared for the Attorney-General of the Commonwealth to intervene pursuant to the Judiciary Act in order "to argue for the widest possible interpretation of s.32 of the Federal Court of Australia Act, and in addition to argue that the Federal Court, once it is properly seised of an application can deal with the application for an injunction pursuant to common law principle quite apart from 8.32 Federal Court of Australia Act." Insofar as it may have been necessary the Court granted leave to the Attorney- General of the Commonwealth to intervene. No Attorney-General of a State appeared pursuant to the notices given. The hearing proceeded at Adelaide on 23, 24 and 25 May 1979 and at Melbourne on 28 and 29 May 1979 and at the conclusion of the hearing, the Court reserved its decision. Each of the respondents is a corporation under s.45(1) of the Act, R. v. Judges of the Federal Court of Australia ex parte West Australian National Football League (Inc.), supra. The nature of a club and of a league is illustrated by a passage from the judgment of Stephen J. at pp. 459-60 : "The basic unit in organized football is the club. A group of clubs make up a league or association within which they conform to a common code of rules and compete amongst themselves. 'The prosecutor West Perth Football Club (Inc), is such a basic unit and is a member of a highly developed State-wide league, the Western Australian National Football League (Inc), the second prosecutor. The league is in tum a member of a national body, the National Football League, of which the league's counterpart in South Australia, the South Australian National Football League (Inc), is also a menber. The activities of the West Perth Club exhibit many features of what some deplore as the commercialization of sport, features which have been described in other judgments. It is no doubt the fate of sporting clubs whose teams engage in competition with other clubs that, as their competitive encounters attract increasing public interest, so too will their need for revenue increase 1£ they are to continue successfully to engage in ne eee es ava EDUTOUNTY UNTER TST USTOE NON TunT te) OTSA S77 ST DECT IETS TOS unpE ar Onn SSR STON SED SOT RIE PTO Se ORE. SNOT en Bayo mE Dee Vn nO Yo tenner Onno ' 6. gompetition with rival clubs, seeking and retaining skilled players and providing facilities for increasing numbers of members and accommodation for other spectators at matches. As a club's popularity grows and with it its needs for fumds, so too does its ability to obtain those funds. Instead of having to rely largely on membership fees, its gate receipts increase and other profitable avenues open up. ... The objects of the West Perth Football Club as expressed in its rules are in themselves entirely consistent with what would be expected of a sporting club ... Its principal activity consists of all that is involved in fielding club teams in the series of matches whichigo to make up the annual competitions organized by the league. It is directly from this activity that it derives almost half its income since it receives a large share of the gate takings and other receipts which the league derives from matches played by the club's teams. Its membership fees provide another third of its income, the balance coming fron profit on bar trading, catering and the like and from the sale at a profit of club badges, ties and souvenirs. These income producing activities are no doubt in the nature of trade and in one sense it can be of little significance that the spectacles which the club promotes involve teams of footballers. The staging of sporting spectacles may quite well provide that activity from which a trading corporation derives its income, However the fact that it is Australia's most popular spectator sport, football, which is in question is, in another sense, of great importance. It explains why 1t is that the club has thousands of fee paying members who yet derive no profits from the club why its unpaid committee members devote their time as its officers, why the whole complex of ardently supported clubs, of State leagues and of national associations exist and thrive, those responsible for their promotion being content to find their reward in the satisfaction of their enthusiasm for football." The national League is a company incorporated pursuant to the law of the State of Victoria. Under its Articles of Association, the various State leagues including the Western Australian League and the South Australian League are affiliated bodies and each affiliated body is entitled to te a neve ON TOR Laced 3. a i tt ee re 7. nominate one person as its representative for membership of the National League. One of the main objects of the National League is "3. (b) to promote, advance, cultivate foster and control the Australian Game of Football." The powers of the National League include the following "18. (b) Subject to Article 47 of these Articles of Association to frame and at any time to alter or revise the laws governing the game ... (e) to frame and at any time to alter or revise regulations covering the tems and conditions of the application for and the granting or refusing of clearances of players transferring from a Club in one State to a Club in another State or from a Club of one affiliated body to a Club of another affiliated body in the same State and providing for penalties for breach or attempted breach of such regulations by affiliated bodies, clubs or players." Article 47 provides the method by which the laws of the game may be varied. The laws of the game made by the National League include the following : "34. REGULATIONS - BINDING ON PLAYERS The Interstate Clearance and Permit Regulations of the National Football League of Australia Limited for the time being 1n force shall apply to and be binding upon all Leagues, Associations and Bodies represented on or affiliated with the National Football League of Australia or affiliated with an Affiliated Body of the NFL and all persons who play in or with such Leagues, Associations and Bodies shall obtain a permit to play in accordance with the prescribed rules of any of the particular Leagues, Associations or Bodies. If a person shall play for a Club In a match played in a competition under the control or direction of a League, Association or Body represented on or affiliated with the National Football League of Australia Limited, or affiliated with an Affiliated Body of the NFL without such person having first obtained Pen inns Na igi hhh npahtenrdenaatieae hi mth a deat ri mL at Pa ei hele NC ean ea Cee Unt ON Opt ane. On Ue See DOT IrTe . 8. a permit to play with that Club, the Club for whom such person so played shall be deemed to have lost such match whatever the score." The National League has made what are called the Interstate Clearance and Permit Regulations and by reason of Law 34 of the laws of the game those Regulations are binding on, among others, the Western Australian League and the South Australian League and upon all persons who play in or with those __ leagues or with constituent clubs of those leagues including players who play in club games. Thus the rules and regulations are binding upon the applicant. Under the Clearance and Permit Regulations, a player ef an affiliated body, including a club of the Western Australian League, must obtain a clearance from that affiliated body, in the present case the Western Australian League, before being eligible to apply for a permit to play with another affiliated body, including a club of the South Australian League, in another State or with another affiliated body in the same State. A clearance is not required if a player has not played competition football during a period of 3 years prior to seeking a transfer from one State to another but even then must receive permission from a committee of the National League before he is eligible to play in his own State. When a player wishing to transfer from one State to another has been refused the necessary clearance twice within a specified period, he may apply to an Appeals Board which is constituted by the regulations. The Appeals Board has power to grant or refuse a clearance and in reaching its decision is required to consider and take into account all relevant circumstances including a number of specified matters. The affairs of the Western Australian League are regulated by rules. Members of that league are the Australian Football Clubs admitted to it. West Perth is a member of the Western Australian League, Included among the objects of that league are the following : "4, (a) To promote, control manage and encourage football matches and competitions in and out of the State of Western Australia. Mee ' - . - Air De ee pts SAO mnti Dh oe lee menindeeaeelenatth dia seca semen nae ACs Sle ON a HN SC he ma Ae adi lee nt kA etal Re ae ALA eee ray 9. (b) vo define the territories allocated to a Club and from time to time to alter such territories --eee eee (c) To determine the terms and conditions upon which persons may play football for Clubs or upon which Clubs may take part in matches. (a) To arrange matches with other Leagues and to select and control all representative - League teams." The Western Australian League submits to and is bound by the constitution and rules of the National League and its rules contain provisions relating to the qualification of players and related matters. It is not necessary to make a detailed reference to those rules, it is sufficient to say that under ' them a person is not allowed to play football as a member of a team of a club wnless he has been granted a permit by the Permit Committee which is constituted by the rules and which is empowered to grant or refuse a permit to any player and t to hear and determine applications relating to clearances. Subject to qualifications not presently relevant, a person who has resided in the district allotted by the league to a club for 30 days is residentially bound to that club and is entitled to a permit to play football with that club. Once a person becomes residentially bound to a club, in the absence of a clearance, he is not eligible to be granted a permit to play for any other club wntil he has resided outside the district of that club for 2 years and has become residentially bound to the new club by residence in the district allotted to that club and has so resided for 30 days. A person not residentially bound to a club is eligible for a permit to Play with any club provided that if he has played anywhere in Australia outside Western Australia he has complied with the Interstate Clearance and Permit Regulations of the National League and the rules of the Western Australian League. A register is kept of players to whom permits have been granted. If a player desires to play with a club other than the club for which he has been granted a permit he must first obtain a clearance from the Permit Committee, The Interstate Clearance and Permit Regulations apply to all interstate clearances but a clearance interstate shall not be granted unless ; 10. "86 ... the Permit Committee is satisfied that the application is approved by the Player's Club or the Club to which the person is residentially bound as the case may be and a majority of all the other Clubs then members of the League." Provision is made for appeals by a player refused a clearance. The appeal 1s heard by an Appeals Board constituted by the rules and in considering the appeal, the Appeals Board is reguired to consider and take into account all relevant circumstances including a number of specified matters. The rules provide for the affiliation of other associations conducting football games and the rules apply to those associations. The affairs of West Perth are regulated by rules. One of its objects is to foster the Australian National Game of Football and to provide facilities for the playing of the game. It is affiliated to and is a member of the Western Australian League. The South Australian League is for all practical purposes a mirror image of the Western Australian League, but operates in the State of South Australia. Its affairs are regulated by rules and its objects include the following : "(1) '% promte, control, manage and encourage the Australian Game of Football (hereinafter in these Rules referred to as 'football'). (2) % promote, control, manage and encourage Teague football Matches and competitions between League Clubs as hereinafter in these Rules defined. (7) to arrange and control the time, place and conditions under which all matches arranged or promoted by the League shall be played." The South Australian League is constituted by 10 named clubs, one of which is Norwood. The rules constitute a Permit Committee with powers similar to the Permit Committee constituted under the rules of the Western Australian League. The South Australian League is affiliated with the National League. The rules regulate the registration of players and the granting of permits and clearances. For present purposes it is sufficient ll. to say that the provisions of the rules are similar to the provisions of the equivalent rules of the Western Australian League except the residential qualification 1s 3 years and a player must be registered with the South Australian League ; and in the absence of obtaining a clearance, reside within the district of another club for a period of 3 years before being eligible for a permit with that other club and cannot play football with a club during that 3 year period. The Clearance and Permit Regulations of the National League and the laws of the game of football passed by the National League are incorporated in and form part of the rules of the South Australian League. The rules make 1t an offence for a club to play in its team a person not registered as a player member of that club and is liable to the loss of premiership points gained by the team in which that person plays and/or a fine of not more than $200.00. Under its rules, the South Australian League stages a program of matches played by its member clubs and, subject to some qualifications, is entitled to the receipt of the proceeds of the matches so arranged. The rules make provision for the revenue of the South Australian League and its application. Part of the net income of the League is distributed among the member clubs. Likewise, the rules : provide for the affiliations of other associations conducting football games and the rules apply to those associations. Norwood is a corporate body and its affairs are regulated by rules. One of its objects is to promote, practise, encourage and foster the Australian National Game of Football and is an associated club of the South Australian League and subject to the rules and by-laws of that League. In May 1978 the applicant was 25 years of age. In the year 1957 his family had moved from Albany to Perth and as a result of living in the areas they did, the applicant became - - residentially bound to the Perth Football Club, a member of the Western Australian League. In 1973 the applicant played in one football match with the reserves team for that club and in 1975 he was granted a clearance from the Perth Football Club and obtained a permit to be a player for West Perth, During the years 1975, 1976 and 1977 he played a total of 69 games with West Perth. He showed considerable ability as a footballer and received payment ; eee a — = 12. from West Perth for his services as a footballer for that club. He became what is known as a "professional footballer" and says that he is carrying on the trade, business or occupation of a professional footballer. For the 1977 football season he received $90.00 from West Perth for each game he played for that club. At the end of that season he entered into negotiations with Norwood and as a result entered into an agreement in writing dated 13 April 1978 to play football for Norwood for the years 1978, 1979 and 1980. It is not necessary to refer to the terms of that agreement save to say that he was to receive payment for the services he provided as a player. Before entering into that agreement he was told by the Committee of Management of West Perth that he would never be granted a clearance to play for Norwood. In the early part of the year 1978, negotiations took Place between the applicant and West Perth relating to the applicant remaining in Western Australia and playing for West Perth during the football season of that year, but no agreement was reached and no contract was entered into covering the whole of the 1978 football season. The applicant played 2 matches with West Perth and in April 1978 he and his wife moved to Adelaide where they took up residence and each obtained employment. The applicant is a professional footballer and after Moving to Adelazrde the applicant, on two separate occasions, sought a clearance under the rules 7f the Western Australian League to enable him to apply for a permit from the South Australian League to play for Norwood. On each occasion his application for a clearance was refused by the Permits Committee of the Western Australian League. He did not appeal against those refusals. He did not play competitive football until after the interim order made by the Full Court of the Federal Court of Australia on 30 June, 1978. Thereafter he played for Norwood in the football competition organised by the South Australian League. I accept the evidence that it is not uncommon for a club in a football League seeking the services of a football Player who is registered as a player with a club in another football League to make a monetary offer to that other club as consideration for that other club consenting to a clearance Pele oP ee ee en eee pe att ae tee ee! — Pa er ea nee or a ote eee = - - - - aeo--- He eee 13. -- -r for that player to enable him to obtain a permit to play with the first club. The consideration may include a transfer of a player as well as the payment of money. The payment of ' money is commonly referred to as a "transfer fee" and can range from as low as $4000.00 up to $100,000.00. The player ' receives no part of that money. In addition a club seeking a player may make attractive offers to him. Apart from payments made for services rendered as a player, either on an annual Salary or on a match basis, a club may make arrangements for the player to obtain other lucrative employment, a place of residence and a potential to earn additional money by way of advertising activities. I accept the evidence that the effective professional life of a footballer is limited and that a period of 3 years during which he is not able to play competition matches in a football league can affect adversely his skills as a football player. Likewise during that period he is excluded from engaging in his trade, business or occupation as a footballer for a significant period of his professional life thereby depriving him of his ability to receive payment for his services as a footballer. . Clubs which are successful in their football competition attract larger numbers of members to the club, larger numbers of spectators at matches at which they play and receive a greater financial return. In South Australia, the club playing on its home ground receives 60% of the net gate receipts and the away from home club receives 40% of the net gate receipts which are computed after payment of ground manager's fees and other league \ charges. The return to clubs is different in other State leagues. In addition a club is entitled to sell home match tickets to its supporters prior to the commencement of the football season and the club retains the whole of the proceeds from the sale of those tickets. As a club improves in its position in a competition, normally it attracts larger spectator attendances. Likewise, its takings from other activities such as advertising, sponsoring and prize moneys increase as the spectator attendances increase. The clubs which win most of their matches generally attract the most spectators. There is a tendency for certain clubs to be high on the competition ladder regularly each season while correspondingly other clubs tend to remain on the lower part of 14, that ladder. In order to win matches, a club must have the best players it can afford and evenness within its team. In order to achieve this, clubs continually try to improve the quality of the players and evenness within the team by training and encouraging players bound to them by residence or permit and attracting players from other clubs, including clubs in other State leagues, by offers to those players and by the offer of transfer fees, including a mutual transfer of players, to other clubs. Before considering the evidence further it is desirable to state the basis upon which the claims are made. Primarily, the applicant relies upon s.45 of the Act, the relevant provisions of which are as follows : "45.(2) A corpration shall not - (a) make a contract or arrangement, or arrive at an understanding, if - (i) the proposed contract, arrangement ° or understanding contains an exclusionary provision; or - : (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 458, 'competzrtion', 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 15. related to such a corporation, supplies or acquires, or 1s likely to supply or acquire, yoods or services or would, bul . for the provision, supply or acquire, or be likely to supply or acquire, goods or services." In s.4{(1) of the Act, the phrase "give effect to" has the following extended meaning - "in relation to a provision of a contract, arrangement or understanding, includes do an act or thing in pursuance of or in accordance with or enforce or purport to enforce". Although reliance was placed on the whole of s.45(2) of the Act, 1n substance the case was based on s.45(2) (b) (ii). The applicant claimed that the respondents, insofar as they complied with those provisions of the rules and regulations of the National League, the Rules of the Western Australian League, the Rules of the South Australian League and the law of the game which prevented the applicant from playing football for Norwood in matches conducted by the South Australian League, hereinafter called "the clearance and permit provisions", were giving effect to a provision of a contract arrangement or understanding which has the purpose or has or is likely to have the effect of substantially lessening competition, the word "competition" having the meaning contained in s.45(3). In support of this claim, the applicant sought to establish by evidence, the existence of one or more of three markets and these can be stated shortly as follows : 1. The market in and around Adelaide in which the clubs compete for spectators to attend 5 Australian rules football matches, hereinafter called "the spectator market". ' This market it was claimed, was limted to those spectators interested in Australian Rules Football. 2. The market throughout Australia in which football clubs buy and sell the right to the transfer of football players from one club to another, hereinafter called "the club to club market." 3._ The market throughout Australian in which Ne tee ee wee eee a es eof neil on meee ee ee et 16. ' clubs compete with each other to attract professional footballers to provide their services to the club, hereinafter called the "club to footballer market." Further or alternatively, the applicant claimed that the clearance and permit provisions, to the extent they restrained him from playing football other than with Perth, are unreasonable in restraint of trade and therefore could not be enforced against him or Norwood. In support of this claim reliance was placed on what was said by Barwick C.J. in Ex parte Western Australian National Football League (Inc,), supra, at p,454 :- "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 v. Tutty (1971) 125 C.L.R. 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 a restraint of trade : see Wilberforce J. 1n Eastham v. Newcastle United Football Club Ltd. [1964] Ch. 413; Blackler v. New Zealand Rugby Football League 1 "Ginc.) [1968] N.Z.L.R. 547; also Buckley v. , Tutty. But in those cases the restraint of trade was found in the limitation on the freedom of the playei- to take employment, not of course on the footing that the employers were in trade or trading. However, the code of football in the New Zealand case required the players to be amateurs : yet the restraint was void," The further or alternative claim is based upon the common law doctrine of restraint of trade and is a claim which would normally come before a State court exercising State jurisdiction. The claim therefor raises the question of whether the Federal Court has jurisdiction to hear and determine the claim of the applicant insofar as it is based on a breach of the common ' law doctrine of restraint of trade. Under s.71 of the Constitution, the judicial power of eee van ora te tes ee ee sy, al. ~~ 17. the Commonwealth is vested in the High Court of Australia "and in such other federal courts as the Parliament creates and in such courts as it invests with Federal jurisdiction". Sections 75 to 77 of the Constitution which relate to the original and conferred jurisdiction of the High Court and the jurisdiction of other federal courts, are set out in full "75. In all matters - (i) Arising under any treaty: (ii) Affecting consuls or other representatives of other coumtries: (iii) In which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party: {iv) Between States, or between residents of different States, or between a State and a resident of another State: (v) In which a writ of Mandamus or prohibition or an injunction is sought against an officer of the Commonwealth: the High Court shall have original jurisdiction. 76. The Parliament may make laws conferring original jurisdiction on the High Court in any . matter - : ~ (i) Arising under this Constitution, or - involving its interpretation: (ii) Arising under any laws made by the Parliament: (iii) Of Admiralty and maritime jurisdiction: (iv) Relating to the same subject-matter claimed under the laws of different Stal>os. 77. With respect to any of the matters mentioned in the last two sections the Parliament my make laws -~ (i) Defining the jurisdiction of any federal court other than the High Court: (ii) Defining the extent to which the jurisdiction of any federal court shall be exclusive of that which belongs to or is invested in the courts of the States: (iii) Investing any court of a State with federal jurisdiction." The word "matter" is not defined in the Constitution. The relevant provisions of s.51]1(xxx1x) are set out :- "51. The Parliament shali, subject to this Constitution, have power to make laws for the peace, order and good government of the Commonwealth with respect to :- Vege ey ee -- ee ee ever te ee -— ee - Be ne a eA A nh te ain apa eee ee RE Ee et Se = Stead ae were 18. &xxix Matters incidental to the execution of any power vested by this Constitution ... in the Federal Judicature ..." In the exercise of the powers conferred upon it, Parliament has constituted the Federal Court of Australia, s.5 Federal Court of Australia Act 1976. The Federal Court is a superior court of record and is a court of law and equity. Part III of the Federal Court of Australia Act is headed "Jurisdiction of the Court" and Division 1 of that Part is headed "Original Jurisdiction". Section 19({1), being within Part III Division 1, is as follows :- "19. (1) 'The Court has such original jurisdiction as is vested in it by laws made by the Parliament, being jurisdiction in respect of matters arising under laws made by the Parliament." This jurisdiction comes clearly within s.77(i) and s.76 (ii) of the Constitution. It is desirable to quote three other sections appearing in Part III, Division I of the Federal Court of Australia Act. They are : - "21. (1) 'The Court may, in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed, (2) A suit is not open t® objection on' the ground that a declaratory order only is sought. 22. The Court shall, in every matter before the Court, grant, either absolutely or on such temms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him in the matter, so that, as far as possible, all matters 1n controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters avoided. 23. The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate." 19. Section 32 of the Federal Court of Australia Act 1s contained within Part III, Division 3 of that Act. That Division is headed "General" and s.32 is as follows :- "32. (1) To the extent that the Constitution permits, jurisdiction is conferred on the Court in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Court 1s invoked. (2) The jurisdiction conferred by sub- section (1) extends to jurisdiction to hear and determine an appeal from a judgment of a court so far as it relates to a matter that is associated with a matter in respect of which an appeal from that judgment, or another judgment of that court, is brought." The Trade Practices Act is a law made by the Parliament. Part VI of the Act is headed "Enforcement and Remedies" and under s.80, being within Part VI, the Federal Court has jurisdiction to grant injunctions, see definition of "Court" in s.4 of the Act. Section 86, also within Part VI, is as follows : "86. Jurisdiction is conferred on the Court to hear and determine actions, prosecutions and other proceedings under this Part and that jurisdiction is exclusive of the jurisdiction of any other court, other than the jurisdiction of the High Court under section 75 of the Constitution." As was said earlier, the applicant has brought these proceedings seeking injunctions under s.80 of the Act restraining the respondents from engaging in conduct that constitutes a contravention of s.45 of the Act being a provision within Part IV of the Act. The High Court has held that the Federal Court of Australia has jurisdiction to hear and determine that claim. , Counsel for the applicant, supported by Counsel for the Attorney-General of the Commonwealth, has contended that the Federal Court has jurisdiction to hear and determine the claim insofar as it is based on the common law doctrine while counsel for the resp6éndents has denied the existence of that 20. jurisdiction. 1t becomes necessary, therefore, for the Court to determine whether it has jurisdiction to hear and determine the claim by the applicant insofar as it is based on the common law doctrine of restraint of trade. It was contended that the Court had jurisdiction under any one of the three following heads namely : 1. Jurisdiction arising from the incidental power implied from the jurisdiction granted pursuant to the Constitution, s.19 and s.22 Federal Court of Australia Act and the Trade Practices Act. 2. Jurisdiction conferred by s.32(1) of the Federal Court of Australia Act. 3. Jurisdiction conferred by s.22 of the Federal Court of Australia Act. Professor Lane in The Australian Federal System with United States Analogues, the Law Book Co. Ltd., 1972, ina chapter entitled"ss.75,76 - High Court's Original Jurisdiction Generally" at pp.453-462 discusses under the sub-heading "Pendent jurisdiction" a number of cases in which the High Court has exercised original jurisdiction over matters which, on their face, appear to be outside the original jurisdiction of the High Court. The expression "pendent jurisdiction" is used in the literature of the jurisprudence of the United States of America to describe the judicial implied incidental power under which a federal court when exercising jurisdiction over a federal matter, exercises jurisdiction over a pendent State matter. His conclusion is stated at p. 453 : "Pendent jurisdiction arises when a party seeks to protect some right which he alleges has been violated; that violation gives rise to a cause of action for which the courts provide relief. When asking for this relief the party proposes several grounds which would entitle him to the relief. So long as one of these grounds attracts the High Court's original jurisdiction, the Court will then proceed to the merits, that is, the Court may grant the relief asked for - if necessary on a ground other than that which attracted jurisdiction. But the jurisdictional ground and the pendent ground must be based on substantially the same facts or involve substantially the same elements." In order to come within the implied incidental power, the pendent State matter must not be severable or distinct from the matter properly before the Court. In my opinion, subject to one qualification, the conclusion drawn by Professor Lane is supported by High Court decisions. In the High Court decisions, the question has arisen ' in proceedings in its original jurisdiction with respect to Matters under s.75 of the Constitution and under its original jurisdiction conferred by the Parliament under s.76 of the Constitution. In this latter respect, the conferred jurisdiction has arisen under the provisions of the Judiciary Act 1903, in force from time to time and in particular under s.30(a), s.33 and s.40A. In s.2, Judiciary Act, the words "suit", "cause" and "matter" are each given an extended meaning but the definition of "matter" cannot affect the meaning of that word appearing in the Constitution. The word "matter" is used on a number of occasions in sections 75,76 and 77 of the Constitution and depending on their context, may have different meanings. See per Latham C.J. in Carter v. Egg & Egg Pulp Marketing Board for the State of Victoria (1942) 66 C.L.R. 557 at pp.577-580. (Carter's Case). R. v. Carter;ex parte Kisch (1934-1935) 52 C.L.R. 221 involved an application for a writ of habeas corpus under s.33 Judiciary Act. Evatt J. had to consider whether the writ could be directed to the captain of a ship detaining the applicant on board the ship. The captain was not an officer of the ' Commonwealth. The primary basis of the claim was that the provisions of the Act authorising the detention were beyond the powers conferred by the Constitution and the secondary basis was that the procedures provided by the Act had not been folldwed. The primary basis for the claim involved a matter arising under the Constitution, s.76(1) of the Constitution and s.30(2) dJudicary Act, while the secondary basis did not come within any express grant of jurisdiction. On the question of jurisdiction Evatt J. said at pp.223-4 :- AO ha Ran ne IRN A tc a Sl tn seh eee te 22. "The jurisdiction of this Court was invoked because the applicant based his first and main claim upon the Constitution. He contended that his detention was not authorized, either by any valid law of the Commonwealth, or by any provision of the Immigration Act itself. In particular he contended that sec.3(gh), which alone is relied upon as the authority for making him a prohibited immigrant, is ultra vires the Commonwealth Parliament. I have come to the conclusion that the constitutional objection is untenable, but that the proper steps under sec.3(gh) of the Inmigration 'Act for declaring the applicant a 'prohibited inmigrant' have not been taken. The jurisdiction of this Court, once vested, is not lost by reason of the rejection of the constitutional point. See Ex parte Walsh and Johnson; In re Yates (1925) 37 C.L.R. 36, where an order was made absolute on the ground of non-compliance with the statute," R. v. Bevan ex parte Elias & Gordon (1942) 66 C.L.R. 452, (Bevan's Case) is a similar type of case where a writ of habeas corpus was sought in the High Court under s. 33 Judiciary Act. Original jurisdiction was claimed under s.76 (i) of the Constitution and s.30(a) Judiciary Act. Starke J. at p.464-6 said : "This Court, however, has not a general jurisdiction over the liberty of'the subject ' (Attorney-General for the Commonwealth of Australia v. Colonial Sugar Refining Co. Ltd. (1914) A.C. 237, at p.255; 17 C.L.R. 644, at p.654; at is not a common law court but a statutory court. To the Constitution and the laws made under the Constitution it owes 2ts existence and all its powers, and whatever jurisdiction is not found there either expressly or by necessary implication does not exist. 'The Constitution does not in general terms, as in the case of the State Constitutions with reference to Supreme Courts, endow the High Court at a stroke with all the powers of the Court of King's Bench' (The Tramvays Case [No.1] (1914) 18 C.L.R. 54, at p.75.) It has appellate jurisdiction (Constitution, sec.73) and original jurisdiction (secs.75,76). It is the original jurisdiction of the Court that is invoked in the present proceedings : See R. v. Commonwealth Court of Conciliation and Arbitration; Ex parte Whybrow & Co. (1910) 11 C.L.R. 1; The Tramways Case [No.1] (1914) ws mene se ad re at 23. 18 C.L.R. 54, And I agree with Isaacs J, that the powers given by sec.33 of the Judiciary Act 1903-1940 can only be exercised within the range of jurisdiction conferred upon the Court under the provisions of the Constitution (Whybrov's Case (1910) 11 C.L.R. at pp.48,49: C£&. O'Connor J. at p.42; Jerger v. Pearce (1920) 28 C.L.R. 588). In addition to the matters in which original jurisdiction has been conferred upon the High Court by sec.75 of the Constitution, the Judiciary Act 1903-1940 in sec.30 has provided that the High Court shall have original jurisdiction in all matters arising under the Constitution or involving its interpretation, but no law has been made in general terms conferring original jurisdiction on the High Court in any matter arising under the laws made by the Parluarent, though jurisdiction has been given to the High Court 1n various matters arising under laws made by the Parliament, e.g., Income Tax Acts, Patents Act, and so forth :Cf. Federal Commissioner of Taxation v. Lewis Berger & Sons (Australia) Ltd. (1927) 39 C.L.R. 468. The Defence Act 1903-1941 confers no original jurisdiction whatever upon this Court in relation to the proceedings of courts-martial: See Defence Act 1903-1941, sec. 100. Counsel for the convicted men could do no more than refer the Court to the provisions of the Judiciary Act - 1903-1940, sec.33, which, for reasons already appearing would not sustain the rule nisi miless the jurisdiction of the Court had been attracted. But consideration has led me to the conclusion that the matter before us involves the interpretation of the Constitution, which founds the original jurisdiction of this Court, though we heard no argument to that effect from coumsel. And the jurisdiction being thus attracted, this Court is clothed with full authority essential for the complete adjudication of the matter and not merely the interpretation of the Constitution (Troy v. Wrigglesworth (1919) 26 C.L.R. 305; Hume v. Palmer (1926) 38 C.L.R. 441; O. Gilpin v. Commissioner for Road Transport & Tramways (N.S.W.) (1934) 52 C.L.R. 189, at p.200; Hopper v. Egg and Egg Pulp Marketing Board (Vict.) (1939) 61 C.L.R. 665, at p.673.) Once jurisdiction is acquired by the Court, that jurisdiction is not lost by reason of the rejection of the constitutional point (R. v. Carter; Ex parte Kisch (1934) 52 C.L.R. 221, at p.229)." See also William J. at pp.480-1. In Hopper v. The Egg and Egg Pulp Marketing Board (Victoria) (1939) 61 C.L.R. 665, the Blaintiff commenced proceedings in the High Court raising questions concerning - ee eet - eS a ee —_ en - 24. a State Act. The nature of the proceedings is stated by Latham C.J. at pp.668-9 : "Under sec.90 of the Constitution the powers of the Commonwealth Parliament to impose duties of excise has become an exclusive power. In this action the plaintiff complains that under a State Act, the Marketing of Primary Products Act. 1935 of Victoria, an umlawful excise duty has been imposed in respect of goods. He also complains that the Act upon its true construction does not authorize a deduction made fron moneys paid to him. 'The interpretation of the Constitution of the Commonwealth is involved in the former complaint, and upon this basis the action has been instituted in this court. The case was ordered to be argued before the Full Court under sec.18 of the Judiciary Act 1903-1937." On the question of jurisdiction the Chief Justice said at pp.673-4 : "t entirely agree with my brother Starke that it is the duty of this court to be satisfied that it has jurisdiction before it deals with a case. The court cannot assume jurisdiction merely because the - parties raise no question as to jurisdiction. But in this case I am of opinion that there is jurisdiction because this action 1s a matter involving the interpretation of the Constitution (Judiciary Act 1903-1937, sec.30(a))}. 'The fact that the constitutional cbjection has failed dees not deprive the court of jurisdiction if 'the facts relied on were bona fide raised, and were suci: as to raise' the question (froy v. Wrigglesworth (1919) 26 C.L.R. 305, at p.31l1,per Barton, Isaacs and Rich JJ.). Although the claim based on the Constitution has failed, I camot discern a satisfactory reason for saying that it was not a bona-fide claim so based." McTiernan J. concurred in the reasons for judqment by the Chief Justice. Starke J. at p.677 considered that the claim based on a contravention of the State act was merely colourable and did not raise any real question involving the Constitution and therefore the High Court had no jurisdiction to hear the claim based on the non~authorisation of deductions made. Evatt J. at p.681 expressed the opinion that : "The original jurisdiction is attracted by reason Of the constitutional question, but it is not limited to the determination of Fe Te a et NON tl EN ER mR A ee Meme alee Seas, a ae 25. such question. The legal validity or strength of the plaintiff's constituticnal point is quite immaterial so long as it is genuinelv raised." Accordingly. the Court exercised jurisdiction with respect to the State matter. In O'Neill v. O'Connell (1945) 72 C.L,R. 101 a case pending in the Supreme Court of a State was removed to the High Court pursuant to s.40A Judiciary Act then in operation. When a case was so removed the High Court had jurisdiction to hear and determine the matters in controversy between the parties and not merely those matters which were within the jurisdiction under s.75 of the Constitution or the jurisdiction conferred by Parliament under s.76 of the Constitution. In O'Neill v. O'Connell Starke J. said at pp.115-6 "There are some passages in R. v. Maryborough Licensing Court; Ex parte Webster & Co. Ltd. (1919) 27 C.L.R. 249, which suggest that only the inter se question is removed into this Court; that the jurisdiction of this Court is confined to the determination of that question because of the limited nature of the original jurisdiction of this Court : See Constitution, ss. 75 and 76, and Judiciary Act, s.30. It is, however, the cause that is removed by s. 40A. 'Once the cause is removed,' this Court 'is clothed with full authority essential for its complete adjudication : it is the cause which is removed, and not merely the question involving the interpretation of the Constitution' : Cf, Ex parte Walsh and Johnson; In re Yates (1925) 37 C.L.R. 36, at p.130. But the Court must be satisfied that its jurisdiction attaches, that the decision on the constitutional question is necessary for the adjudication of the rights of the parties. And jurisdiction attaches, I gather, at the moment the Supreme Court in the course of its proceedings encounters and not before it encounters the constitutional question." In the same case, Dixon J. said at p. 125 : "But once the 'cause' is lawfully removed here, then the determnation of the cause Lies within the jurisdiction of this Court, which, miess it exercises the power conferred by s.42 or exercises its discretion to remit the whole or any part of it, may dispose of the matters in controversy and give what judgment and make what order appears right upon the facts and the law." 26. A limitation on the implied 1uncidental power is illustrated by Carter's Case, supra. There the plaintiff commenced proceedings in the High Court claiming jurisdiction under s.30(a) Judiciary Act. Three issues were raised and are stated by Latham C.J. at p.568: "This is a demurrer by the defendant The Egg and Egg Pulp Marketing Board for the ; State of Victoria to a statement of claim in an action in which Walter Carter and others are plaintiffs. The plaintiffs claim, first, a declaration that three Acts of the Parliament of Victoria are invalid; secondly, a declaration that a particular regulation (No. 37) made under those Acts is invalid; and, thirdly, an account of the defendant Board's dealings with large quantities of eggs delivered to the Board by the plaintiffs and payment of any amount found due upon the taking of such account." The High Court had jurisdiction with respect to the first issue by reason of s.76 of the Constitution and s.30(a) Judiciary Act. The Court exercised jurisdiction on the second issue. The Court held that it did not have jurisdiction to ' hear and determine the third issue. With respect to this in issue Latham C.J. stated the question at p.577 : ' "The claim is based entirely upon State legislation. It does not involve any question of the interpretation of the Commonwealth Constitution, It could have been made the abject of a separate proceeding. If it had been made the subject of a separate proceeding it could not have been suggested that this Court had any jurisdiction in relation to it. But 1t has been joined in a single proceeding with other claims which do involve the interpretation of the Constitution and which therefore do fall within the jurisdictim of the High Court (Judiciary Act 1903-1940, sec. 30(a).} Does this circumstance bring within the jurisdiction a claim which, being completely severable from claims which are within the jurisdiction, would otherwise not have been within the jurisdiction?" The Chief Justice at pp.577-580 considered the meaning of the word "matter" when appearing in the Constitution and a large number of earlier decisions of the High Court. I have referred earlier to this passage, a passage which should be read in full. "He then continued at p.580 : oe nk te eee ca ate mite AB Re Wen a ole 27. "But in each of these cases a single claim or charge or a defence thereto was supported upon several grounds, one or more of which involved the interpreation of the Constitution. None of the cases mentioned presented the feature which is to be found in this case, namely, an entirely severable claim having no relation whatever to another claim or claims made in the same proceeding which other claim or claims alone involved the interpretation of the Constitution." See also Starke J. at pp.585-587, Reference should be made also to Parton v. Milk Board (Victoria) (1949) 80 C.L.R. 229 per Latham C.J. at p.249 and Dixon J. at pp. 257-8 and P.J. Magennis Pty. Ltd. v. The Commonwealth (1949) 80 C.L.R. 382 per Williams J. at p.425. Analgous questions on the exercise of jurisdiction in the High Court have been raised with respect to the jurisdiction conferred by s.75(v) of the Constitution. The High Court has jurisdiction in "all matters ... in which a writ of Mandamus, or prohibition or an injunction is sought against an officer of the Commonwealth." The High Court has frequently issued writs of prohibition against a person not being an officer of the Commonwealth in proceedings where the writ has been issued against an officer of the Commonwealth. The basis on which that jurisdiction has existed is given in R. v. Drake-Brockman ex parte National 011 Pty. Ltd. (1943) 68 C.L.R. 51 per Latham C.J. atpp.57-58 : "It was suggested in argument that s.75(v) of the Constitution, relating to prohibition against an officer of the Commonwealth, did not authorize the issue of a writ of prohibition against the Federation, which is a party to the proceedings before the Board. It has been the regular practice of the Court to issue writs of prohibition under s.75(v) against parties to proceedings in the Arbitration Court, and, in my opinion, there is no reason for regarding this practice as unauthorized. Par.v of s.75 of the Constitution is prefaced by the words : "In all matters,' so that the relevant provision is 'In all matters in which a writ of ... prohibition ... is sought against an officer of the Commonwealth the High Court shall have original jurisdiction.' 'The provision 1s not merely that this Court may issue a writ of prohibition against an officer of the Commonwealth. Jurisdiction is conferred upon the Court in any matter in which such a writ is sought. In this matter a writ is sought against ee te ee Re ee Fa ot a a a th te ee Ee at A Fane iene ee en fe 28, officers of the Commonwealth and against the Federation." The presence of an officer of the Commonwealth is essential to the exercise of jurisdiction under s.75(v) of the Constitution and in the absence of such an officer the High Court has no jurisdiction to direct the issue of a perogative writ against a person not being such an officer, see R.v.The Judges of the Commonwealth Industrial Court ex parte Cocks (1968) 121 C.L.R. 313 per Kitto J. atpp.323 - 4: "Upon this view of the substantive question in the case there can be no doubt that a partial prohibition (see Walsh v, Ionides (1853) 1 E. & B. 383, at pp.389~390 [118 E.R. 479, at p.482]) would go to both the member of the Commission who made the award and the respondent union to prohibit further proceedings in respect of cl.30(1) (a) an relation to a person not being at the relevant time an employee of an employer bound by the award. This relief is in effect one of the two forms of relief which the prosecutor seeks in this case; but because the jurisdiction of the High Court to grant prohibition under s.75(v.) of the Constitution exists only in a matter in which prohibition is sought against an officer of the Commonwealth, the relief of prohibition is not available in this Court -against the union in the absence of the appropriate menber of theCommission, notwithstanding that, as was pointed out in Ioadon Corporation v. Cox (1867) L.R. 2 H.L. 239 at p.280, 1t would be so available in a court exercising a general jurisdiction to grant prohibition. It is answer, I think, that by the same order nisi prohibition 1s sought against the judges of the Commonwealth Industrial Court to prohibit further proceeding upon the order made by that Court. Their Honours are officers of the Commonwealth and as such are amenable generally to prohibition in this Court, but the application that is here made against them is a distinct 'matter ' from the 'matter' which consists of the claim to prohibition against further proceedings in respect of the award. I therefore think that the order nisi should be discharged in so far as it relates to cl.30(1) (a) of the award." By way of comment in the present case; the applicant was named as a party to the proceedings for prohibition in the High Court. In my opinion, the Federal Court has a judicial implied incidental power. ~ This jurisdiction does not depend upon s.32 rr a 29. Federal Court of Australia Act. It arises from s.76(1i) and s. 77(i) of the Constitution and s.19 and s.22 of the Federal Court of Australia Act. It is a jurisdiction arising by necessary implication - see Bevan's Case, supra, per Starke J. at p.464. The existence of the jurisdiction comes within a principle founded upon implication and formulated by the adoption of the famous words of Marshal C.J. in M'Cullock v, Maryland (1819) 4 Wheat. 316 [4 Law. Ed. 579]. "Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional." See Grannall v. Marrickville Margarine Pty. Ltd. (1954-1955) 93 C.L.R. 55 per Dixon C.J., McTiernan, Webb and Kitto JJ. at p.77. In my opinion the implied incidental jurisdiction arises whenever there is before the Federal Court a matter vested in it by laws made by the Parliament being in respect of matters arising under laws made by the Parliament and the claim made is supported by grounds which do not arise under laws made by the Parliament but which are not completely severable having no relation whatever to, the claim made in respect of matters arising under laws made by the Parliament. In those circumstances, th. Federal Court has jurisdiction to hear and determine the claim insofar as it is based on those other grounds. The claim made must be in respect of matters arising under laws made by the Parliament and must be bona fide and substantial, but the validity or strength of the claim in respect of the matters arising under laws made by the Parliament is quite immaterial so long as they are genuinely raised. In determining whether, in any particular case, the Federal Court has the implied incidental power assistance can be had by a consideration of decisions of the Supreme Court of the United States of America, For many years the principle applied by that Court was as stated in Hurn v. Oursler 289 U.S. 238. The Court distinguished permissible from nonpermissible exercises of federal judicial power over state law claims, by contrasting 30. "A case where two distinct grounds in support of a single cause of action are alleged, me only of which presents a federal question, and a case where two separate and distinct causes of action are alleged, one only of which is federal in character. In the former where the federal question averred is not plainly wanting in substance, the Federal Court, even though the federal ground not be established, may nevertheless retain and dispose of a case upon the non-federal ground; in the latter it may not do so upon the non-federal cause of action." 289 U.S. at 246." That case was decided in 1933 at a time when the meaning of the phrase "cause of action", was a subject of serious dispute. | Subsequent to that decision the unification of law and equity | was effected by the Federal Rules of Civil Procedure. A similar union had been brought about in England by the Supreme Court of Judicature Act 1873 (England) s.24(7). Similar provisions apply to proceedings in the High Court and the Federal Court, see s.32 Judiciary Act and s.22 Federal Court of Australia Act respectively. The principle presently applied 1n the United States is stated in United Mine Workers of America v. Gibbs (1966) 383 U.S. 715. In that case, Brennan J. delivered the opinion of the United States Court of Appeals for the 6th Circuit. After referring to Hurn v. Oursler, supra, and other authorities and the subsequent unification of law and equity, Brennan J. said at pp.725-6 : " This limited approach 1s unnecessarily grudging. Pendent jurisdiction, in the sense of judicial power, exists whenever there is a claim 'arising mder [the] Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority ...,' U.S. Const., Art,ITI s.2, and the relationship between that claim and the state claim permits the conclusion that the entire action before the court comprises but one constitutional 'case'. The federal. claim must have substance sufficient to confer subject matter jurisdiction on the court. Levering & Garrigues Co. v. Morrin, 289 U.S. 103. The State and federal claims must derive fron a common nucieus of operative fact. But if, considered without regard to their federal or state character, a plaintiff's claims are such that he would ordinarily be expected to try them all in one judicial proceeding, then,assuming substantiality of the federal -issues, there 1s power in federal courts to hear the whole. ales aenenenemta eo ae oI oes oo . eos sae - ._oo—e--- -_- " ae oe — — 31. - That power need not be exercised in every case in which it 1s foumd to exist. It has consistently been recognized that pendent jurisdiction is a doctrine of discretion, ' not of plaintiff's right. Its justification lies in consideration of judical economy, convenience and fairness to litigants; if these are not present a federal court should hesitate to exercise jurisdiction over state claims, even though bound to apply state law to then, Erie R. Co. v. Tompkins, 304 U.S. 64". ASR Fs * , ¥ Applying the principles stated and on the facts of this case, I am of the opinion that the Court has jurisdiction to hear and determine the claim made by the applicant insofar ° as it is based on the common law doctrine of restraint of trade and that the Court should exercise that jurisdiction. The facts on which the claim is made under the Trade Practices Act are the very same>facts on which the claim is made under the common law doctrine. The one form of relief is claimed. The claim made under the Trade Practices Act is made bona fide and is substantial. The common law doctrine relied upon as a ground is not completely severable from the grounds supporting the claim under the Trade Practices Act. The opinions expressed by the High Court in Hornsby Building Information Centre Pty. Ltd. v. Sydney Building Information Centre Ltd. (1978) 18 A.L.R. 639 are not directed to the existence or otherwise of a judicial implied incidental power. RN ET a ne IIL in RE epi path etme TE aE Oe A DATO! webeatalAl Having found jurisdiction under the first head, it : is not necessary to express an opinion on the other two heads of argument, but it is desirable that mention be made of them. Counsel for the applicant and for the Attorney-General Foe pene ee ' of the Commonweaith each contended that s.32 Federal Court of \ Australia Act conferred a separate and distinct jurisdiction upon the Federal Court and that the section was a valid exercise of power by the Parliament. It was contended that ame, the words "to the extent that the Constitution permits" contained in the section were directed to ensure the application of s.15A Acts Interpretation Act 1901, as amended. The section then made it clear that the jurisdiction to be conferred was not that conferred expressly by s.19 Federal Court of Australia Act 32, or by way of a judicial implied incidental power. Thus it was contended that the jurisdiction conferred was in respect of matters that are associated with matters in which the jurisdiction of the Court is invoked. Thus where a matter is properly before the Court, the Court has, under s.32, jurisdiction in respect of matters that are associated with the matter properly before the Court. In this context, the crucial word is "associated". Counsel referred to the use of the word "associated" in the reasons for judgment given by Latham C.J. in Carter's Case, supra. Tn that case, the third claim was for an account with respect to eggs delivered to the Egg Board. The Chief Justice had held that that claim was entirely severable from the claim within the jurisdiction of the High Court. The Chief Justice then said, 66 C.L.R. pp.580-1 :- "For the reasons stated I am of opinion that the claim for an account, not being in itself a matter in which this Court has jurisdiction does not become such a matter by being associated with other claims in relation to which the court has _ jurisdiction." The emphasis is mine. The Judiciary Act does not confer on the High Court jurisdiction in respect of matters not otherwise within its jurisdiction but are associated with matters in which the jurisdiction of the High Court is invoked. cf. s.76 of the Constitution. Counsel contended that s.32 of the Federal Court of Australia Act was enacted to give effect to the remarks of the Chief Justice and to confer jurisdiction in respect of associated matters. It is not necessary to express an opinion on the limits to be placed in determining what are associated matters. To support the validity of the section, counsel referred to s.51 (xxxix) of the Constitution and in particular to the power of the Parliament to make laws with respect Ane ae NR fe me FAR Sree ne Pema S. tet at, uate, a Ate kee. Saat eat = Ce ae OTLEY TuOw Fest 33. to matters incidental to the execution of any power vested by the Constitution in the federal judicature. They contended that the Federal Court formed part of the federal judicature and the Parliament had power to make laws with respect to matters incidental to the execution of the jurisdiction conferred on the Federal Court under s.77 of the Constitution. In support of their contentions, Counsel relied upon Griffin v. The State of South Australia (1924) 35 C.L.R. 200 especially per Isaacs A.C.J. at pp.204-6 and Gavan Duffy and Starke JJ. at pp.207-209, and Le Mesurier v. "Connor (1929) 42 C.L.R. 481 per Knox C.J., Rich & Dixon JJ. at pp.496-8. See also Wynes, Legislative Executive and Judicial Powers in Australia 5th Ed. pp.369-371. Finally, under the third head, it was contended that s.22 Federal Court of Australia Act conferred jurisdiction on the Federal Court to hear and determine the claim made by the applicant insofar as 1t was based on the common law doctrine of restraint of trade. It is difficult to see how s.22 confers a separate and distinct jurisdiction upon the Federal Court. In view of the opinions already expressed, it is sufficient to say that s.22 is discussed by a Full Court of the Federal Court in the exercise of original jurisdiction in McLeish v. Faure (1979) 25 A.L.R. 403 at pp.413-416 There is nothing further I would add. The substantial ground relied upon to support the applicant's claim under the Trade Practices Act was the allegation of a contravention of s.45(1)(b)(i1). That paragraph proscribes a corporation from giving effect to a provision which has the purpose or which is likely to have the effect of substantially lessening competition. Section 45(3) defines competition for the purpose of s.45 and in substance competition means competition in any market in which a corporation supplies or acquires goods or services. Section 4E of the Act defines the word "market" - " 4E. For the purposes: of this Act, 'market! means a market in Australia and, when used in relation to any goods or services, services and other qoods or services that are substitutable. for°or othenase competitive with, the first-mentioned qoods or services." The nature of a market 1s described in Trade Practices Commission v. Ansett Transport Industries (Operation) Pty. Ltd. (1978) 32 F.L.R. 305 (The Ansett Case), at pp.310-312. I adopt the views therein expressed. In particular, reference is made to the fact that conceptually a market is an area of ii ' " 34, includes a market for those coods or | close competition between different persons, the field of } rivalry between them. The meaning of the word "competition" may vary according to the context in which it is used. In the Shorter Oxford Dictionary the word "competition" eh amt is given the following meanings : "1. the action of endeavouring to gain what another endeavours to gain at the same time; the striving of two or more for the same object; rivalry; Fake et 2. Contest for the acquisition of something; a match; a trial of ability." When used in s.45 of the Act, the word is used 1m a comercial or market, there must be substitution between one product and another and between one source of supply and another in response to changing prices or the quality of the product being supplied. In the Ansett Case, the concept of competition is discussed at pp.325 and I adopt the views therein expressed. i | economic sense. Thus in order to have competition in a | I quote the following extract appearing at p.325 : ; "Of all these elements of market structure, y no doubt the mst important is (2), the ¢ condition of entry. For it is the ease with which firms may enter which establishes , the possibilities of market concentration over time, and it is the threat of the entry of a new firm or a new plant into a market which operates as the ultimate regulator of competitive conduct." economic sense is not to be confused with the word "competition" { The word "competition" when used in a commercial or when used in a sporting sense when the word has a different 9 ate en eh ee a -_ =3 = : - 35. Meaning. Sporting teams compete with each other to win a sporting event. Football teams engage in matches. 'They compete against each other to win a premiership. In the present case, care must be taken to ensure that the use of the word "competition" does not cause confusion. In my opinion, the applicant has failed to establish the existence of the spectator market. Counsel for the applicant expressly disclaimed the existence of a market based upon sporting entertainment generally or even between entertainment derived from differing codes of football although, as an afterthought, did suggest there was competition between games conducted by the South Australian League and the Association respectively. The Association is affiliated with the League and subject to the control of the League. The evidence he called and his submissions therean were directed to establishing a market which he defined as the market in and around Adelaide in which the various clubs of the South Australian League competed for spectators and members at games or spectacles at which they participated. The evidence, accepted as it is,:!does not establish the existence of a market so defined or the existence of competition in a market within the meaning of s.45(2) (b) (ii) of the Act. Each of the clubs-f1ield football teams which are in competition with teams fielded by the other clubs. The League is constituted by those clubs. The League stages the matches in which the teams fielded by the clubs compete. The League determines what clubs ae to be admitted to the League. The players are registered with the League. The League determines the prices to be charged to admit spectators to the games and determines the financial returns to the clubs. Insofar as the clubs are in competition with each other, they are in competition at the direction of the League. The League determines the order in which the matches are to be played and does this in a way to attract as many Spectators to matches as possible. The sporting entertainment ; is provided by the League, the clubs being used as pawns directed by the League. Any competition in a commercial or economic sense results from the directions given by the League. The structure of the League and its clubs are not the structure of a market within the meaning of that word as used in s.45 of eee ee ——- - - rr re ere 36. the Act, nor does the competition between the clubs constitute competition within a market for the purposes of s.45 of the Act. In my opinion likewise, the applicant has failed to establish the existence of the club to club market. There is no doubt that as between clubs within any one of the leagues and that as between clubs of different leagues, agreements are made whereby a club to which a player is tied by registration, permit or residence agrees, for consideration, to approve a clearance of that player to the club providing the consideration. The rules and regulations of the various leagues and clubs form the framework to enable those agreements to be made. It was contended that the same result would follow if instead of the permit or clearance provisions, players entered into contracts with clubs. In those circumstances, it was contended, there would still be a market for the release of players from their existing contracts. That is not the basis on which the claim is made. The alleged market depends for its existence on the rules and regulations and in particular the clearance and permit provisions thereof of the various leagues and clubs. If those provisions did not exist, there would be no club to club market within the framework of the remaining rules and regulations of the various leagues and clubs. Clubs may compete among themselves to attract professional or amateur footballers in an attempt to improve the quality of their teams. This has a tendency to attract more spectators to the matches in which those teams play thereby increasing the financial return to the club indirectly via the league in which the club operates and directly from ancillary activities engaged in by the club. As stated by counsel for the applicant, the club to club market is a market in which football clubs throughout Australia sell the right they have to their footballer to another club. There is no doubt that these transactions do occur. Under the agreements the selling club approves a clearance under the rules of the State leagues or the Interstate Clearance and Permit Regulations as the case may be and where the approval is given a clearance will be granted to enable the player to.play with the buying club. These transactions however do not constitute a market within s.45 of 37. the Act, nor does the competition between the clubs constitute competition within a market for the purposes of s.45 of the Act. There remains to be considered the club to footballer market. It was not really disputed and I find that the rules and regulations of the various leagues and clubs constitute a contract arrangement or understanding within s.45 of the Act and that insofar as those rules and regulations prevent a person from playing football with a club of his choice, contain a provision which is capable of having a purpose which has or is likely to have the effect of substantially lessening competition. Counsel for the applicant contended that the market was defined as the market throughout Australia in which footballers seek to play football for reward with football clubs. Put another way, the market is where footballers sell their skills or services as a footballer and football clubs buy the skills or services of the footballer. It is beside the point that the facilities by which this is able to be done arises from the rules and regulations of the various leagues and clubs insofar as they provide for the staging of the football match spectacles to be viewed by the spectators. Those rules and regulations are in existence and a professional footballer must accept the structures created by them. By complying with the permit and clearance provisions of those rules and regulations the respondents, being corporations within s.45 of the Act, are parties to the contract arrangement or undertaking and are giving effect to a provision which is capable of being proscribed by s.45. A footballer is not free to play for the club of his choice. Under the permit and clearance provisions he must play for the club to which he is residentially bound or he must obtain a permit. In order to obtain a permit he must obtain a clearance in the manner already! indicated. This can be obtained with the approval of the club to which he is tied by the rules and regulations. If the approval is refused he may appeal to a tribunal constituted in accordance with the rules and regulations. He may stay out of playing competition football for two or sometimes three years. The club to. footballer market, as defined, has all the features of ¢ , 38. | , a market within the meaning of that word when used in s.45 of the Act and within that market the permit and clearance | provisions of the rules and regulations of the various leagues and clubs substantially lessen competition. | The issue to be decided here is whether, by reason of the definition of "services" in s.4(1) of ' the Act, the club to footballer market is one in which a club, being a corporation, "acquires ... services or would but for the provision ... acquire, or be Likely to acquire ... services." , Section 45(3) of the Act. The word "services" is given an extended meaning in s.4(1) of the Act. The definition is long and for present purposes the following parts are relevant :- : "'services' includes any rights ... benefits, privileges, or facilities that 1 are, or are to be, provided ... or conferred in i trade or commerce, and without limiting the generality of the foregoing, includes the } _-vights, benefits, privileges or facilities } - that are, or are to be, provided, granted (i) the performance of work ... but does not include rights or benefits being ... the performance of work under a contract of service." It was not disputed that a professional footballer is an employee of a club which acquires his services, Commissioner of Taxation v. Maddalena (1971) 45 A.L.J.R. 426, Buckley v. Tutty, supra. When a professional footballer takes the field in a match for the club which has acquired his services, he is performing work under his contract of service with that club. The word "services" has no clear and stated meaning and the Act does not provide a definitive meaning but it is clear from the inclusive provisions of the definition that services includes the rights or benefits granted or conferred under a contract for or conferred under - (a) a contract for or in relation to - i hc a ee ee eh ne een re an eee ne ne ee cet Nite =r c ern ree SR ree —~ col - 39. the performance of work. In the present case, the question is whether a club, as a result. of. entering into a contract with a professional footballer under the terms of which the footballer is to play football for that club, acquires services, see s.45(3) of the Act. By substituting parts of the extended meaning for the word "services" the question is whether, in those circumstances, the Club "acquires", which by definition includes "accepts," rights or benefits granted or conferred under a contract for the performance of work. Without attempting to place any final meaning on the word "services" the answer to that question must be in the affirmative. But the exclusive provisions of the definition expressly exclude from the meaning of services, riqhts or benefits being the performance of work under a contract of service. It follows therefomthat a club does not come within s.45(3) of the Act when it acquires rights or benefits granted or conferred under a contract for the ' performance of work. In an attempt to overcome this conclusion, counsel for the applicant contrasted the right or privilege to enter into a contract of service with the right or benefit being the performance of work under a contract of service and contended that the right or privilege to enter into a contract of service did not come within the exclusive provisions of the definition. I reject that contention. The right or privilege of the club, if it can be so called, to enter into a contract of service with a footballer is not the acquisition of services by a club under s.45(3) of the Act. In any event the provisions of the rules and regulations of the various leagues and clubs do not restrain the right or privilege of a club to enter into contracts of services, they operate on the performance of work under such contracts or other arrangements in the sense that if a club fields a player in a match without having obtained the necessary clearance and permit that club is liable to suffer a penalty. ' For the reasons given, it follows that the applicant's claim insofar as it is based on the Trade Practices Act fails. otek tea ndatatnonnab nen tAS oil ns tar ale s taeCsna ar Minne ne cenit narnia ah sat " 40. It remains to consider whether t out his claim insofar as it is hased on doctrine of restraint of trade. In Buck he applicant has made the common law ley v. Tutty, supra. a different code of football was under consideration, but the relevant facts for present purposes from the facts of this case. Likewise, law therein stated apply to this case, said in the Joint judgment at pp. 369-382. permit provisions of the rules and regul leagues and clubs operate in restraint o impose upon the applicant a restraint of unreasonable and unjustified. are indistinguishable the pranciples of I refer to and adopt what The clearance and ations of the various £ trade and they trade which is A similar opinion was expressed by Murphy J. in Hall v. Victorian Football League, Supreme Court of Victoria, unreported 31 August 1977. The issue in whether a person residentially tied to a that case was constituent club of the Victorian League was entitled to a declaration that the rules and regulations of the Victorian League, insofar as they wa: prevented him playing football for another constituent club without a clearance, were in restraint of trade. In the course of giving judgment, Murphy J. stated the issue as follows: "The evidence before me showed and a perusal of the Regulations confirms that in fact the whole of the State of Victor1a, and even small areas of New South Wales and South Australia, have been allocated to the tivelve constituent League Clubs. The plaintiff, having resided in East Preston for the requisite period of thirteen weeks, is residentially bound to the Collingwood Football Club. Unless he is prepared to give up his ambition to join the South Melbourne Club, if he complies with regulations as I understand them, he must apply for a permit to play for Collingwood and when such permit is granted he then becomes a player for that Club. He then may apply fora to transfer to South Melbourne. clearance If that application is twice refused he may appeal to the Appeals Tribunal. If his appeal is dismissed his choice becomes one of remaining with Collingwood or moving out of the V.F.L. altogether, or giving up football either for ever or for the requisite period of thirty-six months in order to make the clearance of the Collingwood Club unnecessary to enable him to join another "os me. reees 41. Club. Even then he wll still require the approval of the V.F.L. (Regulation 1{b) (v)." After considering matters of a kind similar to those discussed in Buckley v. Tutty, supra, His Honour said: "Given that V.F.L. football is relevantly a trade and indeed a trade which involves very large sums of money and very substantial inducements and rewards to players who are skilled enough to succeed in it I think it 1s impossible to hold that a system of regulations which prevents an intending player from joining any club but one and puts him thereafter, subject only to a right of appeal to a tribunal, at the whim of the committee of that club does not operate as a restraint of his trade." The Court made the declarations and granted the injunctions sought. In the present case, counsel for the respondents attempted to distinguish those two cases by reference to the matters to be taken into account when an appeal against a refusal to grant a clearance was being heard by the appropriate tribunal. He said that the appeal provisions were such as to make any restraint of trade reasonable. I am not satisfied that the relevant appeal provisions were reasonable, or rather made reasonable what otherwise was an unlawful restraint of trade. For the reasons expressed the applicant has made out his claim insofar as it is based on restraint of trade. Normally, the appropriate injunctions would be granted to give effect to the conclusions reached. Pursuant to the order made by the Full Court of the Federal Court of Australia on 30 June 1978, the applicant is playing football for Norwood. That order is dependent upon arrangements made between the parties to these proceedings. In the circumstances, it is desirable that the Court make declarations under s.21 and s.22 Federal Court of Australia Act, see McLeish v. Faure, supra, granting liberty to the parties to apply to the Court. Accordingly, the following declarations and orders are made: rte me Slice eetea ted moose er coe as Ft aed tea a lh Ne i tT SN NN MPA RN Rm ith Ne Amat LA ASS hae nll v ob i , =o i. 42. A declaration that the rules and regulations of the respondents, the Western Australian National Football League, Incorporated, West Perth Football Club, Incorporated, and the South Australian National Football League, Incorporated, insofar as they require the applicant, Brian Ronald Adamson, to obtain a clearance from the West Perth Football Club in order to be entitled to apply for a permit to play football with Norwood Football Club, Incorporated, are of no effect as being in restraint of trade. A declaration that the rules and regulations of the respondent the South Australian National Football League, Incorporated, insofar as they require the applicant, Brian Ronald Adamson, to obtain a permit in order to play football with Norwood Football Club, Incorporated, are of no effect as being in restraint of trade. A declaration that the rules and regulations of the respondent the South Australian National Football League, "Incorporated, insofar as they render Norwood Football Club, Incorporated, liable to a penalty in the event it includes the applicant Brian Ronald Adamson as a member of a team in a football match organised by that League are of no effect as being in restraint vf trade. An order that the respondents pay the applicant's costs including all costs reserved. An order that all parties have liberty to apply to the Court as they may be advised. I certify that this and the eal d Ga * ¢ preceding pages are a true copy of the Reasons for Judgment herein of the Honourable Mr. Justice MoaryRo? fe haa 46 Noverter 1979 Dated: cee ee eee - see - oe -- = ——---