Melbourne Juventus Soccer Club Ltd v Australian Soccer Federation Ltd [1995] FCA 627

IN THE FEDERAL COURT OF AUSTRALIA ) VICTORIA DISTRICT REGISTRY ) VG 3398 of 1995 GENERAL DIVISION ) BETWEEN: MELBOURNE JUVENTUS SOCCER CLUB LIMITED (ACN 006 116 365) Applicant AND: AUSTRALIAN SOCCER FEDERATION LIMITED (ACN 008 540 770) Respondent IN THE FEDERAL COURT OF AUSTRALIA ) VICTORIA DISTRICT REGISTRY ) VG 682 of 1995 GENERAL DIVISION )

BETWEEN: HEIDELBERG UNITED ALEXANDER SOCCER CLUB LIMITED (ACN 006 116 365) Applicant AND: AUSTRALIAN SOCCER FEDERATION LIMITED (ACN 008 540 770) Respondent CORAM: RYAN J PLACE: MELBOURNE DATE: 8 AUGUST 1995

REASONS FOR JUDGMENT RYAN J: In this matter the Court is required to consider on the application of the two applicants, Melbourne Juventus Soccer Club Limited and Heidelberg United Alexander Soccer Club Ltd whether to grant interlocutory relief varying or continuing relief which was granted or made available in a limited form by undertaking last week. In my view the applicants have demonstrated a serious question to be tried as to whether the Articles of Association of the respondent (the "ASF") do not have the effect that the National Soccer League contemplated by Article 88 is to be conducted as the premier or paramount competition of the ASF. It is true as Mr Macaw QC for the respondent has pointed out that the objects of the ASF and other provisions in the Articles contemplate the conduct by the ASF of other competitions. However, I regard the conclusion as strongly arguable from the context of the Articles as a whole that those other competitions are to be subordinate or subsidiary to the competition the conduct of which is regulated with some particularity by Article 88. It is undesirable, given the present interlocutory state of the applications for relief in the two proceedings, that I express any more comprehensive opinion about the points of construction involved. I should not be taken to have been persuaded, on the present state of the material and without hearing the deponents or any other witnesses, that the directors of the ASF have acted otherwise than in the best interests of the members of the ASF and the sport of soccer as they perceived those interests. However, I do consider that the applicants have established the existence of a further serious question to be tried in respect of the resolution by the ASF directors of 5 August 1995 to reinstate a National Soccer League of 14 teams and to conduct in parallel with it a "Soccer Australia A League" as an elite new competition, with some financial support to be provided by the ASF which is henceforth to be denied to the National Soccer League. That additional question is whether or not that resolution of 5 August 1995 was adopted for an ulterior purpose, in the sense that the ASF by its directors was seeking to achieve indirectly what it is strongly arguable it can only achieve directly by an amendment of Article 88 in accordance with clause 4 of its Memorandum of Association. On the question of the balance of convenience, Mr Macaw has pointed to evidence of a likely accretion of large amounts of sponsors' contributions if the proposed Soccer Australia A League is able to commence play on its proposed opening date of 30 September 1995. However, there is no evidence of any firm agreement, even of a conditional type, to provide sponsorship of that kind. Given that the composition of the proposed A League has not been determined, I consider it unlikely that there will be a large influx of sponsors' funds before these applications can be accorded a final and speedy hearing which I propose to order. On the other hand, there is evidence that the applicants have firm existing sponsorship arrangements or prospects which, at the least, will be imperilled if they are relegated to a subsidiary national or other competition. It was also strongly urged on behalf of the respondent that neither of the applicants has the resources to meet the undertaking as to damages which courts customarily extract as a condition of the grant of interlocutory injunctions. However each applicant has sought to meet that contention in a different way by pointing to resources in the form of players who are capable of being traded for large amounts, or other realizable assets. On balance, that consideration has not inclined me against the grant of interlocutory relief. I propose to reserve to the respondent liberty to apply, if it is so advised, for the provision of security for the undertaking as to damages which I shall extract as a condition of that relief. As well as the balance of convenience affecting the immediate parties to this litigation, there is also to be considered the need for some certainty in the interim in the interests of other clubs and members of the ASF. Those clubs and players would be forced, if no injunction were to go, to make a choice between competing in the proposed subsidiary National Soccer League or the new elite competition which might be struck down if the arguments advanced by the present applicants were to prevail at trial. Mr Macaw also pointed to the availability of an internal remedy by way of appeal as a discretionary factor which should weigh against the grant of an injunction. However, I consider that the availability of a remedy of that kind does not carry the weight which it otherwise would when the relief is directed, as it is in this case, against an action which is arguably beyond the power conferred by the Articles which themselves provide the internal remedy. In the circumstances, I consider that the appropriate course is to maintain what I perceive to be the status quo for the short time which should elapse before the court can accord this litigation a final hearing. It has been indicated, at least on behalf of the respondent, that it could ready itself for a final hearing in a short time, and I consider that the hearing itself should not be inordinately long if it is concentrated on what seem to be the more clearly arguable issues raised by the material presently before the Court. I certify that this and the preceding four (4) pages are a true copy of the reasons for judgment of his Honour Justice Ryan