South Sydney District Rugby League Football Club Ltd (No 2) v News Ltd [2000] FCA 877

FEDERAL COURT OF AUSTRALIA

South Sydney District Rugby League Football Club Ltd v News Ltd (No 2)

[2000] FCA 877

SOUTH SYDNEY DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED v NEWS LIMITED & ORS N 1295 of 1999

FINN J 27 JUNE 2000 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 1295 OF 1999

BETWEEN: SOUTH SYDNEY DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED (ACN 002 487 390)

APPLICANT

AND: NEWS LIMITED (ACN 007 871 178)

FIRST RESPONDENT

NATIONAL RUGBY LEAGUE INVESTMENTS PTY LIMITED (ACN 081 778 538)

SECOND RESPONDENT

AUSTRALIAN RUGBY FOOTBALL LEAGUE LIMITED (ACN 003 107 292)

THIRD RESPONDENT

NATIONAL RUGBY LEAGUE LIMITED (ACN 082 088 962)

FOURTH RESPONDENT

AND the Fifth to Twenty-third Respondents set out in the Schedule

JUDGE: FINN J

DATE: 27 JUNE 2000

WHERE MADE: SYDNEY

THE COURT RULES THAT: 1. the letter of 4 May 1999 not be admitted into evidence. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 1295 OF 1999

BETWEEN: SOUTH SYDNEY DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED (ACN 002 487 390)

APPLICANT

AND: NEWS LIMITED (ACN 007 871 178)

FIRST RESPONDENT

NATIONAL RUGBY LEAGUE INVESTMENTS PTY LIMITED (ACN 081 778 538)

SECOND RESPONDENT

AUSTRALIAN RUGBY FOOTBALL LEAGUE LIMITED (ACN 003 107 292)

THIRD RESPONDENT

NATIONAL RUGBY LEAGUE LIMITED (ACN 082 088 962)

FOURTH RESPONDENT

AND the Fifth to Twenty-third Respondents set out in the Schedule

JUDGE: FINN J

DATE: 27 JUNE 2000

PLACE: SYDNEY

REASONS FOR RULING 1 I have ruled inadmissible both a letter prepared by the incoming Chief Executive Officer of the applicant ("Souths"), Mr Lange, dated 4 May 1999 the burden of which was to highlight alleged management deficiencies and recurrent funding problems at Souths and to propose the need for the overhaul of the Club's management infrastructure and practices, and a consequential line of inquiry. 2 The basis upon which counsel for the first and second respondents ("News" and "NRLI" respectively), Mr Hutley SC, sought to rely on the letter was as part of the process of negativing the claim made in para 36 of the Third Further Amended Statement of Claim to which I will refer below. I would add that the defence put in by News and NRLI to that paragraph was a bare and unilluminating denial of it. 3 Paragraph 36 of the Third Further Amended Statement of Claim pleaded that the criteria adopted to determine which teams should participate in the NRL competition from 2000 were not fair and reasonable, did not treat all clubs equally and consistently, were not adopted fairly and in good faith and favoured clubs in which News or a related company was a member or lender, or otherwise had a pecuniary interest. One of the particulars of this (Particular (d)(iv)) stated that the selection criteria adopted did not treat all clubs equally and fairly in that: "the selection criteria favoured those clubs which had received and continued to receive higher levels of funding than Souths, including the clubs in which News or a related company of News was a member or lender … ." 4 I should indicate that this Particular is one of a number further particularised by reference both to the levels of financial contributions made by News and Super League Pty Ltd to Super League aligned clubs and to the claimed focus of the criteria upon financial criteria that were revenue related. 5 Mr Hutley SC's submission in favour of the relevance of the document and the inquiry supporting it was that in order to make the comparison required to determine whether there was favouring in the criteria that was unfair, it was necessary to have a look to the management structure and practices of the clubs concerned, including that of Souths, as, so it was claimed, the alleged unfairness was premised upon the supposed correlation of funds available and performance - a premise News and NRLI wished to contest. 6 I have taken the view that the document should not be admitted and that the inquiry should not be permitted. In the proceeding insofar as it relates to News and NRLI, the question whether Souths was in fact in the state suggested by the document appeared to me to raise a large issue that was not (save possibly in relation to para 36) otherwise relevant to matters in issue in the proceeding itself. And even if arguably relevant to para 36 for the reason Mr Hutley SC contends, the evidence proposed would open up an evidentiary inquiry which would, given the manner of its raising, occasion the prejudice and waste of time addressed by s 135 of the Evidence Act 1995 (Cth) while having only slight, if any, probative value. 7 Importantly, standing alone - and understandably Mr Hutley SC was not seeking to supplement it in this regard by reference to the circumstances of other clubs - evidence as to whether or not Souths was inefficiently managed would not of itself throw light upon the question whether the selection criteria that were adopted were unfair for the reason given in Particular (d)(iv) even if it helped to explain why it might be that Souths might have fared poorly under the selection criteria. The Particular itself is concerned with a claimed differential impact of the criteria on clubs in virtue of the relative funding levels they received and continued to receive. 8 To determine the question posed by that Particular would require, on the view propounded by News and NRLI, a comparative inquiry into the circumstances of probably most if not all of the clubs (ARL and Super League related alike). Souths has not attempted to, and does not seek to, prove its case by reference to such an inquiry. And for News and NRLI simply to examine the circumstances of Souths alone would not advance the object of the inquiry they contend needs be made even if, in Souths' case, it demonstrated that poor performance (presumably both in financial terms and on the field) was linked to deficiencies in the club's management. Absent comparative or contrasting evidence concerning other clubs, the proper significance to be attributed to the evidence concerning Souths for the purpose of any consideration of the unfairness claim is likely to be conjectural. There is a real risk of generalisations born of an analysis of the pathology of one club being misleading in their signification in any event. 9 In the circumstances, then, I consider that even if otherwise admissible, the letter should be excluded under s 135. Likewise the proposed line of inquiry concerning Souths' alleged management deficiencies and funding problems ought not be permitted to continue. I would add that I incline to the view that News and NRLI ought properly to have pleaded such an important matter if it was to be in issue in the proceeding. Not having been raised by way of defence as a discretionary consideration (as may have been expected if it was to be in issue), its omission was capable of taking Souths by surprise, as Mr Hughes QC has submitted. It is unnecessary, though, given the view I have taken, to exclude the evidence on that basis. 10 Finally I would note that while further objection has been taken to the reception of the evidence as opinion evidence - and it has the character of opinion evidence - I make no ruling on that objection. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Ruling herein of the Honourable Justice Finn.