CATCHWORDS

TRADE PRACTICES - taking advantage of market power - delineation of the market - principles - substitutability - competition - submarkets - United States authorities - sporting leagues - monopolization.

EXCLUSIONARY PROVISIONS - date as at which determination must be made - meaning of "competitive" - meaning of "services" - effect of joint nature of activities of a sporting association on competition - meaning of purpose of a provision in s. 4D - subjective purpose - whether the purpose must be the purpose of all participants - whether the purpose of one participant is sufficient - discussion of purpose of participant not competitive with other participants - substantial purpose within s. 4F - meaning of "substantial" - effect on the construction of s. 4D of the requirement of a substantial purpose - meaning of "contract, arrangement or understanding" - discussion of the degree of commitment required to an arrangement or understanding - necessity for a meeting of the minds of those alleged to be parties - purpose or effect of substantially lessening competition.

DISCRETION TO GRANT OR REFUSE RELIEF IN TRADE PRACTICES MATTERS - discussion of principles - grounds on which discretion might be exercised against making an order.

ECONOMIC DURESS - discussion of principles - whether pressure illegimate.

CONTRACT - implied obligation to do all reasonably necessary to secure performance - construction - implied term that party is not to deprive itself of the capacity to fulfil its obligation.

TORT OF INDUCING BREACH OF CONTRACT - principles - whether defence of bona fide belief that the contract was invalid is a good defence.

FIDUCIARY DUTIES - discussion of fiduciary duties in respect of assets of a sporting competition.

Trade Practices Act 1974, ss. 4(1), 4D, 4E, 4F, 4G, 4L, 45, 46, 80 and 87

Hawick v Flegg (1958) 75 WN (NSW) 255

Buckley v Tutty (1971) 125 CLR 353

Penrith District Rugby League Football Club Limited v Fittler Supreme Court of New South Wales, Santow J., unreported, 8 February 1996

Adamson v West Perth Football Club Incorporated (1979) 27 ALR 475

Adamson v New South Wales Rugby League Limited (1991) 27 FCR 535

Adamson v New South Wales Rugby League Limited (1991) 31 FCR 242

Jones v Dunkel (1959) 101 CLR 298

Murray v Director of Public Prosecutions [1994] 1 WLR 1

Weissensteiner v R (1993) 117 ALR 545

Rivarola v Sunbeam Corporation Limited New South Wales Court of Appeal - Kirby P., Meagher and Sheller JJ.A. - unreported, 2 September 1992

Re Queensland Co-operative Milling Association Ltd (1976) 8 ALR 481

Queensland Wire Industries Proprietary Limited v The Broken Hill Proprietary Company Limited (1989) 167 CLR 177

Arnotts Limited v Trade Practices Commission (1990) 24 FCR 313

Davids Holdings Pty Limited v Attorney-General of the Commonwealth (1994) ATPR 41-304

Dowling v Dalgety Australia Limited (1992) 34 FCR 109

Singapore Airlines Limited v Taprobane Tours WA Pty Ltd (1991) 33 FCR 158

Eastern Express Pty Limited v General Newspapers Pty Limited (1992) 35 FCR 43

Re John Dee (Exports) Pty Ltd (1989) ATPR 40-938

Australia Meat Holdings Pty Limited v Trade Practices Commission (1989) ATPR 40-932

Trade Practices Commission v Australia Meat Holdings Pty Ltd (1988) 83 ALR 299

General Newspapers Pty Limited v Telstra Corporation (1993) 45 FCR 164

Application by Tooth & Co Ltd; Application by Tooheys Ltd (1979) ATPR 40-113

John S Hayes & Associates Pty Limited v Kimberly-Clark Australia Pty Limited (1994) ATPR 41-318

United Brands Company v The Commission of the European Communities [1978] 1 CMLR 429

International Boxing Club of New York Inc v United States (1959) 358 US 242

United States v du Pont & Co (1956) 351 US 377

National Collegiate Athletic Association v Board of Regents of the University of Oklahoma (1984) 468 US 85

North American Soccer League v National Football League (1982) 670 F 2d 1,249

National Football League v North American Soccer League (1982) 459 US 1,074

Philadelphia World Hockey Club, Inc v Philadelphia Hockey Club, Inc (1972) 351 F Supp 462

United States Football League v National Football League (1986) 644 F Supp 1,040

United States Football League v National Football League (1988) 842 F 2d 1,335

Fishman v Wirtz (1986) 807 F 2d 520

Volvo North America Corporation v Men's International Professional Tennis Council (1988) 857 F 2d 55

Sullivan v National Football League (1994) 34 F 3d 1,091

Mark Lyons Pty Ltd v Bursill Sportsgear Pty Ltd (1987) 75 ALR 581

Eastern Express Pty Limited v. General Newspapers Pty Limited (1991) 30 FCR 385

ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460

Carlton and United Breweries (NSW) Pty Ltd v Bond Brewing New South Wales Ltd (1987) 16 FCR 351

Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273

Devenish v Jewel Food Stores Pty. Limited (1991) 172 CLR 32

Thompson v Australian Capital Television Pty Limited (1994) 54 FCR 513

Dandy Power Equipment Pty Ltd v Mercury Marine Pty Ltd (1982) 44 ALR 173

Radio 2UE Sydney Pty Ltd v Stereo FM Pty Ltd (1982) 44 ALR 557

Peter Williamson Pty Ltd v Capitol Motors Ltd (1982) 61 FLR 257

Mikasa (N.S.W.) Pty. Limited v Festival Stores (1972) 127 CLR 617

Vallance v The Queen (1961) 108 CLR 56

Stationers Supply Pty Ltd v The Victorian Authorised Newsagents Association Ltd (1993) ATPR 41,419

Top Performance Motors Pty Ltd v Ira Berk (Queensland) Pty Ltd (1975) 24 FLR 286

British Basic Slag Ltd v Registrar of Restrictive Trading Agreements [1963] 1 WLR 727

Tararua Foundation v Liquor Licensing Authority [1995] 2 NZLR 296

The Commissioner of Taxation of the Commonwealth of Australia v Lutovi Investments Proprietary Limited (1978) 140 CLR 434

Trade Practices Commission v David Jones (Australia) Pty Ltd (1986) 13 FCR 446

Trade Practices Commission v Email Ltd (1980) 43 FLR 383

Federal Commissioner of Taxation v Lutovi Investments Pty Ltd (1978) 20 ALR 157

ICI Australia Operations Pty Limited v Trade Practices Commission (1992) 38 FCR 248

World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181

Trade Practices Commission v Glo Juice Co Pty Ltd (1987) 73 ALR 407

Building Workers' Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104

Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40

Dimskal Shipping Co. S.A. v International Transport Workers Federation [1992] 2 AC 152

Equiticorp Finance Ltd (in liq) v Bank of New Zealand (1993) 32 NSWLR 50

Wayde v New South Wales Rugby League Ltd unreported, S.C., 10 December 1984

Secured Income Real Estate (Australia) Limited v St. Martins Investments Proprietary Limited (1979) 144 CLR 596

Coulls v Bagot's Executor and Trustee Company Limited (1967) 119 CLR 460

Ahmed Angullia bin Hadjee Mohamed Salleh Angullia v Estate and Trust Agencies (1927), Limited [1938] AC 624

Nullagine Investments Pty Limited v The Western Australian Club Incorporated (1993) 177 CLR 635

Ansett Transport Industries (Operations) Pty Limited v The Commonwealth of Australia (1977) 139 CLR 54

Lloyd's Ships Holdings Pty Ltd v Davros Pty Ltd (1987) 17 FCR 505

Trego v Hunt [1896] AC 7

Byrne v Australian Airlines Ltd (1995) 69 ALJR 797

Amann Aviation Pty Limited v Commonwealth of Australia (1990) 22 FCR 527

Renard Constructions (ME) Pty Ltd v Minister of Public Works (1992) 26 NSWLR 234

Service Station Associations Limited v Berg Bennett & Associates Pty Limited (1993) 45 FCR 84

City of Camberwell v Camberwell Shopping Centre Pty Ltd [1994] 1 VR 163

Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd (1995) 130 ALR 469

Short v The City Bank of Sydney (1912) 15 CLR 148

British Industrial Plastics, Ltd v Ferguson [1940] 1 All ER 479 

United Dominions Corporation Limited v Brian Proprietary Limited (1985) 157 CLR 1

Chan v Zacharia (1984) 154 CLR 178

Muschinski v Dodds (1985) 160 CLR 583

Baumgartner v Baumgartner (1987) 164 CLR 137

Royal Brunei Airlines SDN. BHD. v Philip Tan Kok Ming [1995] 3 WLR 64

R v Byrnes (1995) 130 ALR 529

NEWS LIMITED v AUSTRALIAN RUGBY FOOTBALL LEAGUE LIMITED AND OTHERS

NG 197 of 1995

Burchett J.

Sydney

23 February 1996

IN THE FEDERAL COURT OF AUSTRALIA)

                                  )

NEW SOUTH WALES DISTRICT REGISTRY)    NG 197 of 1995

                                  )

GENERAL DIVISION                  )

              BETWEEN:  NEWS LIMITED

                             Applicant

              AND:      AUSTRALIAN RUGBY FOOTBALL LEAGUE LIMITED

                             First Respondent

                        NEW SOUTH WALES RUGBY LEAGUE LIMITED

                             Second Respondent

                        BRISBANE BRONCOS RUGBY LEAGUE CLUB LIMITED, CANBERRA DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED, CANTERBURY-BANKSTOWN RUGBY LEAGUE CLUB LTD, CRONULLA-SUTHERLAND DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED, NEWCASTLE KNIGHTS LIMITED, WESTERN REDS RUGBY LEAGUE FOOTBALL CLUB LIMITED, SOUTH SYDNEY DISTRICT RUGBY LEAGUE FOOTBALL CLUB, EASTERN SUBURBS DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED, ST GEORGE DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED, SYDNEY TIGERS RUGBY LEAGUE FOOTBALL CLUB LIMITED, WESTERN SUBURBS DISTRICT RUGBY LEAGUE FOOTBALL CLUB, MANLY WARRINGAH DISTRICT RUGBY LEAGUE FOOTBALL CLUB, PARRAMATTA DISTRICT RUGBY LEAGUE CLUB LTD, GOLD COAST SEAGULLS RUGBY LEAGUE FOOTBALL CLUB, ILLAWARRA DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED, NORTH SYDNEY DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED and SOUTH QUEENSLAND CRUSHERS RUGBY LEAGUE FOOTBALL CLUB LIMITED

                             Third to Nineteenth Respondents respectively

          AND BETWEEN:  AUSTRALIAN RUGBY FOOTBALL LEAGUE LIMITED and NEW SOUTH WALES RUGBY LEAGUE LIMITED

                             First and Second Cross-Claimants                         in the First Cross-Claim

               AND:     NEWS LIMITED, STAR LEAGUE PTY LIMITED and AH IL PTY LIMITED

                             First, Second and Third Cross-Respondents to the First Cross-Claim

                AND     The Companies named as Fourth to Thirty-First Cross-Respondents respectively in the First Cross-Claim

          AND BETWEEN:  SOUTH SYDNEY DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED and The eleven other incorporated Clubs named as Cross-Claimants in the Second Cross-Claim

                             Cross-Claimants

               AND:     NEWS LIMITED, STAR LEAGUE PTY LIMITED, AH IL PTY LIMITED and The twenty-eight other Cross-Respondents named in the Second Cross-Claim

                             Cross-Respondents to the Second Cross-Claim

          AND BETWEEN:  BRISBANE BRONCOS RUGBY LEAGUE CLUB LIMITED, CANBERRA DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED, CANTERBURY-BANKSTOWN RUGBY LEAGUE FOOTBALL CLUB LIMITED, CRONULLA SUTHERLAND DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED, WESTERN REDS RUGBY LEAGUE FOOTBALL CLUB LIMITED, COWBOYS RUGBY LEAGUE FOOTBALL LIMITED, PENRITH DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED and AUCKLAND WARRIORS RUGBY LEAGUE LIMITED

                             Cross-Claimants in additional Cross-Claims

               AND:     AUSTRALIAN RUGBY FOOTBALL LEAGUE LIMITED and NEW SOUTH WALES RUGBY LEAGUE LIMITED

                             Cross-Respondents to additional Cross-Claims

CORAM: Burchett J.

PLACE: Sydney

DATE : 23 February 1996

                     ORDERS OF THE COURT

THE COURT ORDERS THAT:

     The First and Second Respondents bring in on a date to be fixed Short Minutes of Orders appropriate to reflect the reasons of the Court.

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)    NG 197 of 1995

                                  )

GENERAL DIVISION                  )

              BETWEEN:  NEWS LIMITED

                             Applicant

              AND:      AUSTRALIAN RUGBY FOOTBALL LEAGUE LIMITED

                             First Respondent

                        NEW SOUTH WALES RUGBY LEAGUE LIMITED

                             Second Respondent

                        BRISBANE BRONCOS RUGBY LEAGUE CLUB LIMITED, CANBERRA DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED, CANTERBURY-BANKSTOWN RUGBY LEAGUE CLUB LTD, CRONULLA-SUTHERLAND DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED, NEWCASTLE KNIGHTS LIMITED, WESTERN REDS RUGBY LEAGUE FOOTBALL CLUB LIMITED, SOUTH SYDNEY DISTRICT RUGBY LEAGUE FOOTBALL CLUB, EASTERN SUBURBS DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED, ST GEORGE DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED, SYDNEY TIGERS RUGBY LEAGUE FOOTBALL CLUB LIMITED, WESTERN SUBURBS DISTRICT RUGBY LEAGUE FOOTBALL CLUB, MANLY WARRINGAH DISTRICT RUGBY LEAGUE FOOTBALL CLUB, PARRAMATTA DISTRICT RUGBY LEAGUE CLUB LTD, GOLD COAST SEAGULLS RUGBY LEAGUE FOOTBALL CLUB LIMITED, ILLAWARRA DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED, NORTH SYDNEY DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED and SOUTH QUEENSLAND CRUSHERS RUGBY LEAGUE FOOTBALL CLUB LIMITED

                             Third to Nineteenth Respondents respectively

          AND BETWEEN:  AUSTRALIAN RUGBY FOOTBALL LEAGUE LIMITED and NEW SOUTH WALES RUGBY LEAGUE LIMITED

                             First and Second Cross-Claimants in the First Cross-Claim

               AND:     NEWS LIMITED, STAR LEAGUE PTY LIMITED and AH IL PTY LIMITED

                             First, Second and Third Cross-Respondents to the First Cross-Claim

                        AND  The Companies named as Fourth to Thirty-First Cross-Respondents respectively in the First Cross-Claim

          AND BETWEEN:  SOUTH SYDNEY DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED and The eleven other incorporated Clubs named as Cross-Claimants in the Second Cross-Claim

                             Cross-Claimants

               AND:     NEWS LIMITED, STAR LEAGUE PTY LIMITED, AH IL PTY LIMITED and The twenty-eight other Cross-Respondents named in the Second Cross-Claim

                             Cross-Respondents to the Second Cross-Claim

          AND BETWEEN:  BRISBANE BRONCOS RUGBY LEAGUE CLUB LIMITED, CANBERRA DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED, CANTERBURY-BANKSTOWN RUGBY LEAGUE FOOTBALL CLUB LIMITED, CRONULLA SUTHERLAND DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED, WESTERN REDS RUGBY LEAGUE FOOTBALL CLUB LIMITED, COWBOYS RUGBY LEAGUE FOOTBALL LIMITED, PENRITH DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED and AUCKLAND WARRIORS RUGBY LEAGUE LIMITED

                             Cross-Claimants in additional Cross-Claims

               AND:     AUSTRALIAN RUGBY FOOTBALL LEAGUE LIMITED and NEW SOUTH WALES RUGBY LEAGUE LIMITED

                             Cross-Respondents to additional Cross-Claims

CORAM: Burchett J.

PLACE: Sydney

DATE : 23 February 1996

                    REASONS FOR JUDGMENT

BURCHETT J.:

                        INTRODUCTION

     On 8 August 1907, a meeting of about 50 persons was held at Bateman's Hotel, George Street, Sydney, which resolved to constitute the New South Wales Rugby Football League.  Interestingly, the persons present included the great cricketer Victor Trumper, who was elected honorary treasurer, the president being Henry Hoyle and the secretary James Giltinan.  Although the game now known as rugby league had already been played in England for some years, its origins going back to the English Northern Union, a breakaway from the English Rugby Union since 1894, the new body established at Bateman's Hotel was the first to be called by the name "Rugby League".

     An influential factor in the formation and growth of the new code of football was the desire to provide an enjoyable game which would be self funding, and would enable players of modest means, who might otherwise feel the loss of remuneration from their usual employment, to be paid for their participation in games, and when off work as a result of the injuries inevitably sustained from time to time by football players.  Following the constitution of the New South Wales Rugby Football League, a number of individual clubs were established: a Glebe club on 9 January 1908, Newtown on 14 January 1908, South Sydney on 17 January 1908, Balmain on 23 January 1908, Eastern Suburbs on 24 January 1908, Western Suburbs on 4 February 1908, North Sydney on 7 February 1908, the original Newcastle club on 9 April 1908 and a Cumberland club on 20 April 1908.  It is plain that the New South Wales Rugby Football League and these clubs were formed to pursue a common purpose by activities the central core of which was to be joint.  At the same time, the various clubs were to accept direction in a number of respects from the central body, which organized their formation and, in due course, their sporting competitions.

     Much voluntary work was done in the early days by Messrs Hoyle, Giltinan, Trumper and others.  It is recorded that the patron of the very first club, the now defunct Glebe club, was W.M. Hughes, then the local member of Parliament and later the Prime Minister of Australia.  The League's first venture got away to a flying start in August 1907, with international matches against a New Zealand team being arranged in a matter of days.  Indeed, the rule books of the English Northern Union had not arrived in time, so the games had to be played under rugby union rules.  The League's team played in jerseys bearing the emblem of a kangaroo, by which Australian rugby league test sides are still known today.  A substantial amount was earned through these first international matches, from which the players were paid and a promotional fund inaugurated.  At the end of 1908, an international team was selected, under the name "The Kangaroos", to represent Australia on a tour of England.  By then, the clubs South Sydney, North Sydney, Balmain, Western Suburbs and Eastern Suburbs had adopted the colours in which they still play, and Cumberland had adopted blue and gold, in which Parramatta plays today.

     Over the years, additional clubs joined the League, while a few dropped out, and in 1979 the clubs were Balmain, Canterbury (joined 1935), Cronulla (joined 1967), Eastern Suburbs, Manly Warringah (joined 1947), Newtown, North Sydney, Parramatta (joined 1947), Penrith (joined 1967), St George (joined 1921), South Sydney and Western Suburbs.  The central body was still the unincorporated association, the New South Wales Rugby Football League.  Its position was summarized by McLelland J. (as C. McLelland C.J. in Eq. then was) in Hawick v Flegg (1958) 75 WN (NSW) 255:

    "Besides the general powers of control which are given to the League, the League directly controls the metropolitan clubs."

Cf. Buckley v Tutty (1971) 125 CLR 353 at 373, where it was stated in the joint judgment of the High Court:

    "One of the principal functions of the League is to control, either directly (as in the case of district clubs) or indirectly (through The Country Rugby Football League of New South Wales), the bodies who are employers of Rugby League professionals."

     In 1982, two new clubs joined the competition, which became known as the "Winfield Cup" following the making of a long term sponsorship agreement between the League and Rothmans of Pall Mall Limited.  The two new clubs were Canberra and Illawarra.  Shortly afterwards, in December 1983, the League became incorporated as New South Wales Rugby League Limited, a company limited by guarantee.  I shall hereafter generally refer to it as "the League", although where the context makes it appropriate to do so, I shall also include in that expression a further company, to be mentioned, Australian Rugby Football League Limited.  New South Wales Rugby League Limited was incorporated after a process of consultation with the clubs, and its memorandum of association included the following provisions:

    "3.   The objects for which the League is established and the powers of the League are:-

     (a)  To take over the funds and other assets and the liabilities of the present unincorporated body known as the New South Wales Rugby Football League.

     (b)  To foster and control the game of rugby league football throughout the State of New South Wales and The Australian Capital Territory and generally to take such action as may be considered conducive to its best interests.

     (c)  To co-operate with organizations controlling the game in other States of Australia and other countries in the fostering and control of the game.

     (d)  To provide and maintain grounds, playing fields, materials, equipment and other facilities for the game.

                            . . .

     (f)  To regulate and control the operation of all member bodies and affiliates.

                            . . .

     (j)  To determine which clubs shall be entitled to enter teams in the Rugby League Premiership and other competitions conducted by the League and the terms and conditions upon which and the manner in which Clubs shall make and renew such applications.

                            . . .

     (q)  To grant suspend exclude or forfeit the right of a Club ... to membership of or representation on the League but so that that right shall not be granted, suspended, excluded or forfeited without a resolution therefore [sic] passed by a 75% majority of Directors at a meeting."

Numerous further objects were specified including a general power "to do all things necessary for or incidental to the pursuit of the objects of the League".  The articles of association referred to the existing clubs; provided for the admission of new clubs "as shall be approved by the League"; and provided for the admission, as members of the League and its general committee, of persons agreeing to be bound by the memorandum and articles of association and rules and regulations of the League, as follows: certain office bearers, the General Manager of the League, two representatives from each club, four representatives of a body known as the Country League, two persons representing referees and two representing players, life members, and other persons admitted by the directors to membership.

     The articles give the Board of Directors power to exclude the right of a club to representation on the League in certain events.  Among those events are conduct which in the opinion of the League is prejudicial to the interests, image or
welfare of the League, and alteration of a club's constitution without the approval of the Board of Directors. 

     The relationship of the League to the clubs was plainly intended to remain one of control by the League.  Under the heading "CONSTITUTION OF CLUBS", the articles provide:

    "73.  The Constitution or Memorandum and Articles of Association of each Club and affiliated League and any Rules and/or Regulations made thereunder shall be in such terms as are approved by the Board of Directors.

     74.  Any proposed alteration, addition to or deletion from such Constitution, Rules or Regulations or Memorandum and Articles of Association must be submitted to the Board of Directors for its approval which must be given before such proposed alteration, addition or deletion becomes operative.

     75.  The Board of Directors may at any time require any Club or affiliated League to alter, add to, or repeal any provision of its constitution, Rules or Regulation [sic] or Memorandum & Articles of Association in such manner as it may direct."

Under the heading "COMPETITIONS", the articles go on to provide:

    "76.  The League may conduct such competitions between teams representing all or any of the Clubs or Junior Leagues as the Board of Directors may from time to time determine provided that the Board of Directors may at its discretion invite other Clubs and/or teams to participate in any competition conducted pursuant to the provisions of this clause.

     77.  Each Club shall pay to the League from the proceeds from admission charges to matches played by it in competitions conducted by the
League such amounts as the Board of Directors may from time to time determine.

     78.  The conditions governing the playing of any competition conducted by the League shall be such as are determined by the Board of Directors."

     In addition to the Memorandum and Articles, there were drawn up for the governance of the League certain Rules and Regulations, including "PREMIERSHIP COMPETITION RULES", among which were the following:

    "38.  Each Club desirous of entering a team or teams in the Competition conducted by the League pursuant to the provisions of Article 43 [sic - scilicet Rule] shall lodge an application with the General Manager by such date as shall be prescribed by the Board of Directors.

     39.  Such applications shall be in the form, and shall be supported by such information including information as to the financial affairs of the club, as may be prescribed from time to time by the Board of Directors.

     40.  A Club which enters a team or teams in a Competition conducted by the League in one Season shall not be entitled as of right to enter a team or teams in that Competition in the following Season and the Board of Directors shall be entitled to refuse the application of any Club to enter a team or teams in any Competition conducted by the League.

                            . . .

     42.  Each Club admitted into the Competition agrees to abide by the Memorandum and Articles of Association, the Rules and Regulations of the League and decisions of the Board of Directors of the League and any Committee of the League made pursuant thereto and any terms and conditions imposed upon its admission to the Competition.

     GRADES

     43.  The Competition shall be conducted once a year between such Clubs as the League shall from time to time determine."

     A form of application by a club for admission to the League's Premiership Competition was prescribed under the Rules.  It included an acknowledgment by the club that the League "has an absolute discretion to accept or reject this application", and it provided for the submission of material required by the General Manager of the League "to satisfy the guidelines laid down by the League".  It continued:

    "The Club agrees that if it is admitted to the Competition,

     1.   The Club will abide by the Memorandum and Articles of Association of the League and the Rules and the decisions of the Board of Directors of the League and its Committees made pursuant thereto.

     2.   The Club will abide by all conditions attached to its admission to the Competition.

                            . . .

     4.   Admission is for the one Competition only and the Club is not entitled as of right to admission into the Competition conducted in the following year."

     On 23 May 1986 the Australian Rugby Football League Limited was incorporated as a company limited by guarantee.  By its memorandum of association its powers include:

    "3(a)To take over the funds and other assets and the liabilities of the present unincorporated body known as the Australian Rugby Football League.

     (b)  To foster develop extend and control the game of Rugby League Football throughout the States and Territories of Australia and generally to take such action as may be considered conducive to its best interests. 

     (c)  To co-operate with the Rugby Football League International Board and organisations controlling the game in other countries in the fostering and control of the game of Rugby League."

     In 1988, the Brisbane, Newcastle and Gold Coast clubs joined the competition, and with effect from the year 1995, the competition was expanded to 20 teams by the inclusion of clubs known as the Western Reds (of Perth), the Auckland Warriors (of Auckland, New Zealand), the Queensland Crushers and the North Queensland Cowboys. 

     At various dates during the decade commencing in 1980, the clubs then in the competition became incorporated, and the clubs which have joined later are also incorporated.  The constituent documents of all the clubs declare that they are non-profit associations, and that on a winding up any surplus assets are not to be paid to the members but to a body having similar objects to those of the football club or to a charitable institution.  All have included in their constituent documents provisions specifically tying the club in some respect or respects to the control of the League.  In the case of Canterbury-Bankstown alone, a club incorporated in 1983 to take over the assets and liabilities of a previous unincorporated club, this control by the League is, in terms of the Memorandum of Association, limited to the determination of the "boundaries" within which the club may "control the playing of the game of rugby league football", although the document also provides that the objects of the club include:

    "(p)  To join with the League in controlling and regulating matches and competitions involving rugby league football players within the State of New South Wales.

     (q)  To join with the League in controlling and regulating the movement of rugby league football players between states and between Australia and other countries."

Of course, the terms of admission to the competition themselves, as will have already become plain, involve submission to the control of the League in various respects.  That is in accord with the objects set out in the Memorandum of Association of the League, to which each club may be taken to have agreed when it appointed two representatives to be members of the League on its behalf.  At the same time, a feature of the League's operations over the years has been extensive consultation with representatives of the clubs, through standing committees and otherwise, before the taking of decisions, and particularly before new clubs are admitted.  The representatives and chief executive officers of the clubs have had access to financial and other information about the operations of the League and the clubs.

     Although, for a number of years, admission to the competition was expressly granted by the League, year by year, on the basis that each admission was only for the one year's competition, the operations of the League and the clubs have been carried on upon a basis that looked to a much longer term.  This has been of necessity.  Player and coaching contracts, leases of grounds, contracts providing for the telecasting of games, contracts relating to sponsorships and various contracts of employment, have all had to be concluded for varying periods continuing into the future well beyond a single year's competition.  Very large sums have had to be expended on grounds and grandstands, which could only be justified as long term investments.  Substantial amounts have been spent upon the ongoing development of the game at the juvenile and youth level, a development concerned with the medium and long term future.  The League and the clubs have necessarily proceeded upon the basis that the competition and their association in the joint activities it involves would continue over a lengthy period.  As will be seen, when that assumption was challenged, the League responded by offering each of the clubs a contract, not for one year but for five years, and each of the clubs entered into that contract.

     Because the objects of the League and its existing clubs at any particular time have always centred upon the promotion of the game of rugby league, not for individual profit but as an end in itself, the League has progressively admitted a number of new clubs to its competition.  They have not been required to pay an entry fee or to purchase a share of the extremely valuable goodwill built up by the League and the existing clubs, as at the date of their admission.  They have simply been required to submit to the terms binding all the clubs to the League.  This aspect of the association between the clubs and the League is just one of the features distinguishing it from an ordinary commercial joint venture or partnership.

     Over the course of time, the sources of funds available to the League and its predecessor unincorporated body have changed.  In earlier days, when the principal income obtained through the League competition was gate receipts, the League collected them, distributing a portion to the clubs and retaining what was required to finance itself.  More recently, large sums have been received by the sale of television rights by the League.  Sponsorships have also become a significant source of funds.  For some years now, the League has not received any part of the proceeds of ticket sales for ordinary games, but it has always set the prices for general admission to all grounds, to which clubs are required to adhere.  It has also retained a power of approval in respect of sponsorship agreements entered into by the clubs.

     In distributing funds to clubs out of the surplus available each year, the League has not differentiated on the basis that a particular club may have contributed more than other clubs in that particular year to the income of the League.  The basis has instead been one of sharing.  But in special cases of need, the League has provided support by way of grants or loans not on commercial terms.  It has also made available to the clubs administrative assistance and expertise in a number of ways.  It has furnished sums for the improvement of grounds, and it has made attempts, by various measures, to ensure reasonable equality between the clubs in the fielding of professional teams of footballers (a legitimate aim: Buckley v Tutty (supra) at 377).  The "salary cap" is one of these, although it also has the purpose of protecting clubs, that may have inadequate financial controls, against self immolation by the incurring of huge debts in order to attract talented players.

     From the beginning, the unincorporated body which preceded the League and the League have been essentially concerned with the maintenance of a system under which players are engaged on professional contracts to play the game of rugby league.  Since well before the eruption of the present disputes, the League has had an approved standard form of player's contract, to be entered into between each player and his club.  There have been successive versions of this form of contract from at least as far back as 1986.  The version current in 1994 and 1995, prepared in 1993, was approved by the League after consultation with the players' union.  It has at the top of it logos representing the New South Wales Rugby League and the Australian Rugby League, but the parties to it are the relevant club and player.  By clause 1, the contract expressly provides that "the parties [to it] acknowledge and agree that the relationship between them constituted or evidenced by this Agreement is one of employment with the Club
being the employer and the Player being the employee".  The player also agrees "to be bound by and observe the provisions of the Memorandum and Articles of Association and Rules of the Club, the League and the Australian Rugby Football League Limited".  Provision is made in the form for registration with the League, the player agreeing once again to be bound by its memorandum and articles of association and rules, and authorizing the use of his name and photograph for the purpose of promotion of the game. 

     It is important to note that by this form of contract players become employees; the carrying out of their obligations under the contract is the performance of work under a contract of service: Penrith District Rugby League Football Club Limited v Fittler (Supreme Court of New South Wales, Santow J., unreported, 8 February 1996); Adamson v West Perth Football Club Incorporated (1979) 27 ALR 475 at 505-506, per Northrop J.; Buckley v Tutty (supra, at 372-373); Adamson v New South Wales Rugby League Limited (1991) 27 FCR 535 at 550, per Hill J., and, on appeal (1991) 31 FCR 242 at 245-246, per Sheppard J., and 260, per Wilcox J. (with whom, in this respect, Gummow J. agreed at 283).

     Under rule 46 of the rules and regulations of the League, "A copy of every playing contract entered into between a Club and a player shall be lodged for registration with the League"; and by rule 47 a player shall not play for any club in the competition unless he is registered by the League as a player with that club.  By rule 48, registration of a player requires both that a playing contract between the club and the player be registered, and that an application for registration of the player "in the prescribed form to these Rules duly completed and signed by the player and a duly authorised representative of the Club [be] lodged with the League and approved by it".  There are other conditions as well, including that the player "is not contracted to play for any other Club or Rugby League body".  The prescribed form of application for registration of a player states that enclosed therewith is a copy of the playing contract signed by the player with the club.

                 THE GENESIS OF THE DISPUTE

     About the middle of 1994, some reports appeared in the press suggesting that the large media corporation News Limited was interested in the establishment of a new rugby league competition.  In fact, although this was not known publicly, a document was prepared for News Limited which investigated in detail the feasibility of the establishment of what it called Superleague, to be set up as a company with the name Superleague Limited, the shares in which were to be owned by News Limited.  The idea, actively but secretly promoted to News Limited by the Chief Executive of the privately owned Brisbane club, Mr Ribot, with the knowledge and, as I infer, concurrence of his board, was to establish, from the 1995 season, an elite competition between 12 privately owned teams from Australia and New Zealand.  The document, dated 12 August
1994, described the business of Superleague as "entertainment.  Football will be a part of the entertainment."  (Emphasis added.)  News Limited was to obtain a management fee of 15%, together with the profits flowing through up to four clubs to be owned by News Limited, and also rewards to be earned in other ways.  Superleague Limited was to earn revenue, inter alia, by sponsorships, the sale of free to air and pay television rights, gate takings and merchandising.  It was expected to make, by 1997, an operational profit of $5 million, and much more within another two years.  The document contemplated that most of the clubs would be new, and acknowledged that if Brisbane, Canberra, Auckland and Newcastle were to be involved there would be a difficulty about the use of their current names and logos.  It described in the following terms a proposal to offer licences to participate in Superleague:

    "A club will be offered a share in a team.  If there are three clubs in an area each club will be offered 1/3 of the ownership of that team in return for providing  players to the team.  If only one team in an area accepts the offer then that team owns 100% of the club.  If two teams, they each own 50% and so on."

A diagram illustrative of the proposed organisation showed existing clubs as standing behind new Superleague clubs, and that it would be the Superleague clubs which would employ the Superleague players.  Some of the language of the document is not entirely clear, and doubtless its authors had some more thinking to do, but quite apparently (to anticipate a little) it laid out, in essentials, the very scheme that was ultimately adopted, by which existing clubs joining Superleague became no more than shareholders owning some of the shares in new Superleague clubs.  I do not think any fundamentally different scheme was ever formulated by News Limited.

     Events moved rapidly.  While the chairman of the League, who was also the executive chairman of the Australian Rugby Football League Limited and the Director-General of the International Rugby League Board, Mr K.R. Arthurson, was in the United Kingdom for the 1994 Kangaroo tour of the British Isles and France, he was made aware of a further newspaper article in "The Australian" newspaper suggesting that a competition was being proposed by News Limited.  At a test match at Wembley he spoke to Mr G. Lovett, then a member of the League Board and also an executive employed within the News Limited group.  Mr Lovett said to him something to the effect: "This Superleague business is definitely going on Ken, it's going to happen."  As soon after this as his commitments permitted, Mr Arthurson cut short his own involvement in the tour in order to return to Sydney.  Before returning, he telephoned the League's General Manager, Mr J.R. Quayle, asking him to telephone all club presidents or chief executive officers to advise them that Mr Arthurson was on his way back and would wish to telephone the presidents immediately upon arriving home.  Mr Arthurson also discussed with Mr Quayle the  possibility of having the clubs sign an agreement that committed them to playing in the League's competition for up to five years.  He asked Mr Quayle to make this idea known to the clubs.  It was in fact likely to evoke a favourable response in at least some quarters, since the representatives of a number of clubs had repeatedly raised the problem of their clubs being under the necessity of entering into long term sponsorship and other outside commitments, while having no contractual assurance of continuance in the competition beyond a single season.

     Mr Arthurson arrived back in Sydney on 8 November 1994.  By then, Mr Quayle had already set in train the preparation of an agreement, to be entered into with each club as proposed in the telephone conversation, which was called a Commitment Agreement.  It provided for the club to commit itself to the competition for the next five years, and for the League to admit the club to the competition for the same period.  Mr Arthurson promptly telephoned a number of club presidents and, in the case of the Canberra club, the president of which was absent, a Mr Les McIntyre, an influential person in that club.  Certain other club presidents being unavailable, he asked Mr Quayle to telephone the chief executive officers of those clubs, so that in the case of every club, except the Brisbane Broncos, a senior person was spoken to.  The nature of the proposed agreement and the fact of its imminent dispatch were stated, and a request was made that it be signed and returned as soon as possible.  Following Mr Arthurson's earlier request, Mr Quayle had forewarned the club presidents, so that there had been an opportunity for preliminary consideration of the matter by the clubs, and, according to Mr Arthurson, no one dissented when he made his telephone call.  Neither, according to Mr Quayle, had anyone expressed any reservations to him.   Both Mr Arthurson and Mr Quayle were cross-examined at some length, and I should make it clear that, generally, I accept the evidence of each of them.  They were extremely able men, and I accept that each was endeavouring to give truthful evidence.  Obviously, in a matter involving a great deal of detail, and involving events that occurred over a period of years, my acceptance of them as truthful and capable witnesses does not mean that I think their memories were never at fault on any matter.  But it does mean that I accept them on essentials, and I accept the evidence to which I have just referred.  By contrast, Mr Ribot did not emerge from cross-examination as a reliable witness, and I accept his version of events only where it accords with my view of the probabilities.

     On 10 November 1994, in the morning, Messrs Arthurson and Quayle met Mr K. Cowley, the senior executive of News Limited, and Mr Lovett at the offices of News Limited.  Mr Arthurson referred to media speculation about the establishment of a Superleague, and to suggestions "that there will be a break away or rebel competition".  Mr Cowley replied: "The stories don't come from me."  He then acknowledged that News Limited did have a proposal for a League competition of 12 teams, on which his "people" had been working for some time.  He referred to the document I have mentioned, but did not show it to Messrs Arthurson and Quayle.  He said he wanted to take the game to the rest of the world, and he added: "I love the game Ken, I want you to know that I'd never do anything to harm it."  Asked about the League's role, he was non-committal, suggesting that the League might look after the development of the game while News Limited controlled a peak competition.  He did say: "Superleague is going to happen with or without you people, it is entirely up to you."  Mr Arthurson replied:

    "We would be interested in exploring any way to improve the game with you and to promote it internationally.  It is absolutely essential however for any discussions for it to be understood that the control of the game must stay in the hands of the accepted authority of the game, and that is the Australian Rugby League."

Mr Cowley replied: "We are only seeking a slice of the television cake", to which Mr Arthurson responded:

    "Well you will understand that we have got legally binding contractual arrangements with Nine to the year 2,000.  We can't break that agreement legally, nor should we consider doing so morally, because Nine was there with an offer for the TV rights when the TV industry was in disarray and nobody else would make an offer." 

Mr Cowley said: "I understand that.  I am going to take that matter up with Kerry Packer later in the day."  Not surprisingly, it was made clear within a few hours that Mr Packer had no intention of relinquishing his company's contractual rights. 

     A few days later, immediately before a meeting on 14 November 1994 of which more will be said, Mr Arthurson had a telephone conversation with Mr Cowley in which he said:

    "While I am prepared to negotiate with you and conciliate, the one thing which I will never give ground on is the idea that in any game in which News Limited participates, the control of the game must rest with the Australian Rugby League."

Mr Cowley replied:

    "I appreciate that.  If there is to be a Superleague it has to be under the control of the ARL.  My people are preparing a proposal for you and I expect to be able to get back to you with that proposal in early February."

There was much debate at the hearing as to whether Mr Cowley had ever given an assurance to the League that News Limited would not attempt to set up a rival competition outside the control of the League.  It seems to me that in this telephone conversation Mr Cowley must have intended to convey just that, and I accept that he was so understood by Mr Arthurson.  I have reached this conclusion because I accept Mr Arthurson, but I am fortified in it by the fact that Mr Cowley declined to go into the witness box, and the director of News Limited most intimately concerned with the Superleague proposal, Mr David Smith, was not called either.  Their failure to give evidence, when both were available, attracts the rule laid down by the High Court in Jones v Dunkel (1959) 101 CLR 298.  See also Murray v Director of Public Prosecutions [1994] 1 WLR 1 at 11; Weissensteiner v R (1993) 117 ALR 545 at 550-552, per Mason C.J., Deane and Dawson JJ; and Rivarola v Sunbeam Corporation Limited (N.S.W. Court of Appeal - Kirby P., Meagher and Sheller JJ.A. - unreported, 2 September 1992).

     At 4.00 pm on Monday 14 November 1994, Mr Arthurson chaired a meeting at the League's premises attended by very senior representatives of each of the clubs except the Auckland Warriors, which sent apologies.  The meeting had been called at short notice.  Mr Arthurson reported, with reference to his conversation before the meeting with Mr Cowley: "[H]e did say to me today that he appreciated that, if there was a move towards Superleague, they would accept the fact that it would be controlled by the Australian Rugby League."  By the time the meeting was held, the Commitment Agreements that had been sent out had been signed on behalf of 16 of the 20 clubs, while a further three clubs were only awaiting the holding of formal board meetings before also having Commitment Agreements executed.  A Commitment Agreement had not been sent to the Brisbane Broncos, but straight after the meeting of 14 November 1994, an agreement in the same form was proffered to that club, and it was executed and returned to the League by 29 November 1994.  At the meeting, Mr Arthurson explained why the Broncos had not previously been approached on this matter.  He said: "[W]e were looking for immediate expressions of loyalty towards the game and, I must say, that from the newspaper reports we had received, we weren't absolutely certain we could get that immediate support from the Broncos ... ."  He referred to an article suggesting that the Broncos were involved with News Limited.  The Broncos were represented at the meeting by two directors, Messrs Maranta and Morgan, and by the Chief Executive, Mr Ribot.  Mr Maranta was the spokesman.  He rejected the newspaper article.  He had said, during the meeting:

    "We came down today to find out what the basis of the discussion was all about ... Comments that, somehow, in a clandestine way the Broncos have been involved seems [sic] to be good media hype but has [sic] no basis in truth.  What we're trying to do is find out what's going on."

I am satisfied that the representatives of the Broncos in fact knew very well what was "going on", and were intimately involved in it in a way that could properly be called clandestine.  Mr Maranta was engaged in a deliberate exercise in deception.  But it was made plain at the meeting that all the other clubs had already decided, either formally or informally, to enter into an agreement with the League substantially in accordance with the form submitted to each of them; and, since that appeared to ensure the continuance of the competition, the Broncos decided to do likewise, as they also wished to participate.  So far as the meeting was concerned, it concluded with a clear expression by those present of loyalty to the League, and a clear understanding that the League would not be forcing clubs out of the competition, provided they met the criteria required of all competitors.

     The form of Commitment Agreement that had been sent out to the clubs was drawn as an agreement between Australian Rugby Football League Limited, New South Wales Rugby League Limited (referred to respectively as ARL and NSWRL), and the particular club.  It recited, inter alia, the circumstances under which New South Wales Rugby League Limited conducted and administered the "National Competition" under the logo and banner of the Australian Rugby League, and that:

    "The parties hereto have agreed to provide for the participation of the Club beyond the playing season 1995 until the playing season 1999 upon and subject to the terms and conditions hereinafter set out."

Certain substantive provisions were then set out:

    "NOW THIS AGREEMENT WITNESSES as follows:

     1.   The ARL and NSWRL hereby jointly and severally agree to the Club participating in the National Competition for the playing seasons 1995, 1996, 1997, 1998 and 1999 upon the terms and conditions hereinafter set forth, and the Club for its part agrees to participate in the National Competition for the said playing seasons upon such terms and conditions, and not to participate in any other competition not conducted or approved by the ARL and NSWRL.

     2.   The Club undertakes in favour of ARL and separately in favour of NSWRL to observe and perform all obligations expressed in the Articles of Association and Rules and Regulations for the time being of NSWRL on the part of Clubs and their respective representatives as though the same were set forth herein as contractual promises and conditions on its part, and for so long as the NSWRL shall continue to conduct and administer the National Competition, and the Club undertakes to ARL that in the event that it shall conduct and administer the National Competition in lieu of the NSWRL during the currency of this Agreement, the Club shall thereafter observe and perform all obligations expressed in the Articles of Association and Rules for the time being of the ARL in lieu of the obligations expressed in the Articles of Association and Rules and Regulations of the NSWRL.

     3.   Without limiting the generality of the obligations of the Club under Clause 2 hereof, the Club agrees to observe and perform all directions and requests of the NSWRL and of ARL (if and when ARL shall take over the conduct and administration of the National Competition) relating to (inter alia) ... ." 

(There were set out a number of subjects to which cl. 3 related, beginning with "The signing and lodgment of players' contracts, and the form in which the same must appear", and including "The administration of the Club".)

     After the meeting of 14 November 1994, work continued at News Limited on the development of plans for the proposed Superleague.  Mr David Smith, Mr Ribot and consultants spent many hours on the project, and approaches were made to clubs, which were asked to sign "Confidentiality Agreements".  The title of these agreements was really a misrepresentation, since they had a much more far reaching effect than merely to require the maintenance of confidentiality.  On 30 January 1995, Messrs Arthurson, Quayle and Moore, on behalf of the League, met with Messrs Cowley, David Smith and Lovett at the offices of News Limited.  A Superleague proposal was outlined in terms later to be repeated at a meeting, of which I shall say something, held on 6 February 1995.  Mr Arthurson asked for details, including financial information, but his request was refused on the basis that a confidentiality agreement would have to be entered into before such information could be supplied.  Mr Cowley asked if he could make a presentation to the clubs, and Mr Smith said: "We want the League to support the vision, to support the concept."  During the presentation, it was suggested that the profits would be shared "fifty fifty" between News Limited and the Australian Rugby League.  This proportion, according to Mr Cowley, was "negotiable".  It was agreed that a meeting of representatives of the clubs would be called for 11 am on 6 February 1995. 

     Mr Arthurson chaired the meeting on 6 February 1995, at which the representatives of the clubs (generally, the President, Chief Executive and a director, or other senior officials) agreed to hear News Limited's presentation.  Mr Cowley addressed the meeting for about ten minutes, and then Mr David Smith made a presentation of the Superleague proposal.  According to Mr Arthurson's recollection, Mr Cowley said words to the effect:

    "[A]ny role which News was to play in the game would not result in the ARL losing the control and administration of the game ... It is not intended for News to own the game ... News' interest in Superleague is to provide broadcast opportunities, not proprietorship of the game."

Mr Arthurson recalled that Mr Cowley also said words to the effect: "Whatever happens we will not start up a rebel league."  Mr Quayle has a similar recollection that Mr Cowley, in response to a question from the floor as to whether News
Limited would go ahead and set up a competition independent of the Australian Rugby League, replied: "There will never be a rebel competition."  Counsel for News Limited vigorously contested the accuracy of these recollections, pointing out that very similar words had undoubtedly been used by Mr David Smith at the meeting.  However, Mr Arthurson recalled both the words he ascribed to Mr Cowley and also that Mr Smith said: "News Limited will not start a rebel league".  As I have mentioned, neither Mr Cowley nor Mr Smith gave evidence.  I accept, on the evidence of Messrs Arthurson and Quayle, who had every reason to be more alert than others to such a statement, that Mr Cowley did give an unqualified undertaking in the terms recollected by Mr Arthurson.

     The presentation made by Mr Smith envisaged a competition between 12 teams, only four of which, including Illawarra, would represent the Sydney region.  He was asked who would make the decision which Sydney clubs were to participate, and he replied: "The ARL". 

     After Mr Smith as well as Mr Cowley had left the meeting, Mr Arthurson pointed out to it that a television contract had been entered into with Channel Nine until the year 2,000.  The meeting was told that that included pay television.  Mr Arthurson told the meeting:

    "The League does not want to be part of the News proposal, we can't accept it.  It seems to me that the tactics of News appeared to be to divide and conquer.  ...  Our strength has always been our solidarity; the fact that we have always stood firmly beside each other.  If we continue to stick together like this no one, not even Rupert Murdoch, will break our game up.  The ARL does not want to be a part of the News proposal, and will not accept it."

     After a luncheon adjournment, Mr Packer attended the meeting to make it quite clear that Channel Nine would not yield up its television rights.  Mr Arthurson told the meeting it was important to know where each club stood.  The representatives in turn expressed support for the League.  No one expressed any support for the News Limited proposal.  The representatives of the Broncos, Canberra, Newcastle and the Western Reds indicated that they had each signed a confidentiality agreement with News Limited, but emphasized their firm support of the League.  Mr Morgan of the Broncos and Mr Neil of Canberra specifically said that a Superleague competition would have to be controlled by the Australian Rugby League.

     The League's solicitor, Mr Love, then said:

    "You will recall that in November last you all signed an agreement to remain loyal to the League for the next five years.  Our view is that this agreement will withstand any legal challenge and in that view we are supported by the opinion of senior counsel.  It seems to us however, that for more abundant caution it would be advisable to have the clubs sign a further agreement pledging loyalty to the League, which supplements and supports the original document."

The president of the Eastern Suburbs club, Mr Politis, then moved:

    "That it be recommended to the Board of Directors of the League that any clubs not signing the new Agreement by 9 am on 8 February 1995, or in the case of the Western Reds by 9 am on Thursday 9 February 1995 be expelled from the 1995 competition."

This motion was seconded and carried unanimously.

     Immediately after the meeting had closed, there was a meeting of the board of the League, which resolved not to accept the recommendation embodied in Mr Politis's motion.  I understand that to mean that they rejected the automatic imposition of the penalty envisaged by the motion, being prepared to await the outcome before considering consequences.  It seems likely the merits remained open to examination.

     Also after the meeting, Mr Arthurson telephoned Mr Cowley to advise him that the clubs had unanimously rejected the proposal put by News Limited.  Mr Cowley responded, according to Mr Arthurson:

    "Ken, I am disappointed in that.  I think that it is a great opportunity for the League but we are certainly not discarding the idea, and we will be pursuing the idea in the future.  But I want you to know that any further negotiation or approach will be made through the front door of the Australian Rugby League."

I accept that this was said.  It was consistent with the statements made at the meeting, as I have found, by Messrs Cowley and Smith.  It was also consistent with an assurance attributed to News Limited in a newspaper article published immediately afterwards, to which I shall refer, the authenticity of which was never denied.

     The further agreements suggested by Mr Love were sent to the clubs on 7 February 1995, and each, except the one sent to the Brisbane Broncos, was returned to the League executed within the very short time limit applicable as nominated by Mr Politis.  The Brisbane Broncos also executed the agreement within a short time.  In the cases of Canberra and the Brisbane Broncos, amendments were agreed which did not go to the substance of the agreements.  These further agreements have been called in the proceedings the "Loyalty Agreements".

     As in the case of the Commitment Agreements, each Loyalty Agreement was made between the Australian Rugby Football League Limited, New South Wales Rugby League Limited and a club.  The Commitment Agreement between the same parties was first recited; and then there were recitals in the following terms:

    "B.   Each of the ARL, NSWRL and the Club consider that it is in their mutual interests to ensure that, during the period of this deed, the National Competition is a premier sporting competition, and the premier rugby league competition, of significant interest to as wide a section of the Australian public as possible, involving rugby league players of the best ability and of international and national pre-eminence; and to maintain and enhance the prestige and reputation of the National Competition; and to maintain and enhance the commercial success of the National Competition; and to maintain and enhance the appeal of the National Competition to commercial sponsors and the media ("the Objective").

     C.   ARL, NSWRL and the Club consider that the revenue earning potential of the National Competition and, through distribution of revenue derived from the National Competition, each Club (including the Club) participating in the National Competition, will be enhanced through each club (including the Club) fielding the best possible team to compete in each grade of the National Competition; and the ARL and NSWRL maintaining, and wherever possible continuing to improve, the quality, competitiveness and geographical spread of teams competing in the National Competition, and the number of experienced and well known players competing in teams organised by participating clubs in the National Competition, including but not limited to players participating in teams organised by the Club.

     D.   ARL and NSWRL propose to enter contractual arrangements and other binding commitments and obligations to third parties in relation to the National Competition, including without limitation, long term sponsorship arrangements, arrangements for broadcasting of matches, contracts with providers of sporting venues, arrangements with tour promoters and affiliated national leagues, and arrangements with sponsors for international tours and other commitments (collectively "Relevant Commitments"), which arrangements will ensure [sic - scilicet enure] to the benefit of the Club and other clubs in the National Competition through revenue distributions by ARL and/or NSWRL to clubs.

     E.   ARL and NSWRL wish to make statements and promises to prospective parties to Relevant Commitments as to the quality, competitiveness and geographical range of teams competing in the League and concerning the number of experienced and well known players participating in the National Competition, in order to induce those prospective parties to enter into Relevant Commitments and to maximise revenue from Relevant Commitments expected to accrue to ARL, NSWRL and clubs participating in the National competition, including the Club.

     F.   The Club wishes ARL and NSWRL to maintain and wherever possible enhance the commercial viability of the National Competition and to maximise the revenue earning potential of the National Competition and in consideration of and by way of inducement for NSWRL and/or ARL entering into Relevant Commitments, the Club has agreed to enter into this deed (without limiting the Club's commitments under the Previous Agreement)."

The operative provisions of the Loyalty Agreements included:

    "1    COMMITMENTS TO THE NATIONAL COMPETITION

          1.1  Each of ARL, NSWRL and the Club agrees to use its best endeavours to assist directly and indirectly in achieving and maintaining the Objective.

          1.2  Without in any way limiting clause 1.1, the Club agrees to use its best endeavours to:

              (a)assemble, train and consistently field the best possible teams to compete at each grade in the National Competition, including:

                (i)     maintaining the services of its existing and any further contracted players for the duration of their respective contracts, in accordance with their terms, so ensuring that each of them plays exclusively in the National Competition for the duration of their respective contracts;

               (ii)     securing the services of the most experienced, most talented and well known rugby league players to play in the National Competition, for each of the playing seasons 1995, 1996, 1997, 1998 and 1999;

              (b)assist the ARL and/or NSWRL directly and indirectly to maintain, and wherever possible enhance, the commercial viability of the National Competition, and to maximise the revenue earning potential of the National Competition.

          1.3  Without in any way limiting clause 1.1, the Club agrees that it will exclusively participate in the National Competition for each of the playing seasons 1995, 1996, 1997, 1998 and 1999.

     2.   COMPETITION

          2.1  The Club agrees:

              (a)that it will not directly or indirectly have any economic or financial or other interest or involvement in or otherwise carry on or be engaged in or be concerned as principal, agent, trustee, partner, director, shareholder, financier or otherwise, whether alone or jointly, in any, or in any club or team participating in any rugby league football competition which:

                (i)     may undermine the quality, competitiveness and geographical reach of teams competing in the National Competition;

               (ii)     may adversely affect the number or depth of experienced and well known players participating in the Club's teams in the National Competition, or teams organised by other clubs participating in the National Competition,

              for playing seasons 1995, 1996, 1997, 1998 and 1999;

              (b)that it will not release, waive or otherwise permit or allow players who either now or in the future are under contract or other binding obligation to play for the Club to play in any competition other than the National Competition approved by the ARL and/or NSWRL for playing seasons 1995, 1996, 1997, 1998 and 1999."

There were added clauses providing that the Loyalty Agreement was an addendum to the Commitment Agreement; specifying that it was agreed damages would not be an adequate remedy in the event of breach; a provision for severability if any part or provision should be void, voidable, illegal or unenforceable, the term of the agreement being included "to the intent that the avoidance of any part of the duration of the term shall not affect the balance thereof"; and dealing with various incidental matters.  A clause which should perhaps be mentioned specifically, in view of what happened later, is cl. 4.1, which provided:

    "No party will seek to circumvent or permit circumvention of the operation of this deed, by any legal person or entity which is directly or indirectly controlled or otherwise directed or influenced by that party doing anything which that party has agreed not to do pursuant to the terms of this deed."

     Mr Arthurson gave evidence the effect of which was that the purposes he had in mind in seeking the execution of the Commitment Agreements, and later of the Loyalty Agreements, were the same.  He saw the Rugby League competition as a great achievement of the League and clubs, unrivalled in the world as a rugby league competition.  The agreements were designed to preserve the quality of that competition through the joint participation of all the clubs.  I accept that Mr Arthurson's purposes were of this nature, and that his was the guiding mind of the League on the matter. 

                     THE FINAL CONFLICT

     If Mr Cowley's assurance to Mr Arthurson that "any further negotiation or approach will be made through the front door of the Australian Rugby League" was honest, it represented a complete volte-face by News Limited.  For although News Limited had fairly consistently described the Superleague proposal as involving the participation of the League, plans had been in preparation at least since December 1994 to present the League with a fait accompli by the conclusion of secret deals with officials and players of selected clubs.  This could properly be described as infiltration by the back door.  It was to culminate in what was described in an internal document of News Limited as a "blitzkrieg" - a meticulously planned operation, involving secrecy, suddenness and deception, by which so many key officials and players were to be "signed up" for unprecedented amounts that the clubs and the League would be left defenceless against a virtual takeover by News Limited.  Extraordinary as it may seem, the language of the documents leaves no doubt that those involved eventually pictured themselves as the commanders of a lightning military offensive aimed at the subjugation of the League.  They actually came to use the expression "war room" to describe the control centre of the campaign.  Complete capitulation was the objective; it was no part of the plan to set up a second competition, so that rugby league in Australia would involve two competitions competing between themselves to serve the needs of the public. The expectation and the intention, the evidence repeatedly
revealed, was that the League would be forced to join with News Limited as a captive collaborator in the promotion of Superleague.

     In the Daily Telegraph Mirror of 7 February 1995 (a News Limited newspaper), Mr Cowley was quoted as having said that he "loved" the game of rugby league, of which he would "not contemplate being a `wrecker'", and as having "made it clear there would be no rebel or breakaway competition".  He was also reported to have said that "[n]ow the proposal [for Superleague] had been rejected ... he would not allow himself to be a `wrecker' by pursuing the concept of a rebel league", and that "his refusal to damage the game came above his corporate ambitions".  Finally, he was quoted as saying "a Super League competition could only have ever existed `hand in hand' with the ARL".  The statements in the newspaper were not repudiated, nor were they withdrawn.  But secret meetings continued to take place during February and March between representatives of News Limited and officials of various clubs.  There could not have been any doubt that a number of officials were acting in breach of their fiduciary or contractual duties, nor that in the circumstances they were being intentionally tempted to do so.  The conclusion must be drawn that, accepting the honesty of Mr Cowley's statement at the time it was made, within a very short interval it had been falsified.  Yet nothing was said to Mr Arthurson about a change of mind on the part of News Limited.  By 23 March 1995, the plan of the proposed attack on the League was fully prepared, and Messrs Cowley and Smith, with Mr Ribot, obtained the personal approval of Mr Rupert Murdoch.  The evidence does not disclose whether they told him all the details of their own duplicity.  Mr Cowley had just received a copy of a letter sent by Mr Arthurson, from which he must have understood that reliance was being placed on his word.

     On or about 28 March 1995, News Limited secured contracts with coaches of the Canterbury, Cronulla-Sutherland, Auckland and Canberra clubs.  On 30 March 1995, News Limited commenced the principal proceeding in the present case.  On the evening of the same day, News Limited entered into contracts with large numbers of players who were already employed under contracts with clubs playing in the competition administered by the League.  Mr Ribot had arranged in advance that officials of a number of the clubs would embrace such a coup, and would align themselves with Superleague.  The whole operation was carried out in great secrecy, travel documents being obtained in false names to avoid any notice of what was afoot leaking out.  Coaches who had already secretly accepted offers from News Limited, acting in complete disregard of their duty as coaches employed by clubs that had an obvious interest in retaining the services of the players indefinitely, and were bound to the League, and whose members generally were, of course, quite unaware of what was happening, brought players together to meet representatives of the company late into the night.  Without the opportunity of obtaining legal advice, complex documents were signed by players who may have been overwhelmed by the size of the offers made to them, and by the complicity in the scheme of their coaches.  The connivance of some club board members cannot justify what occurred.  That connivance had been obtained and given in disregard of their obligations.  Mr Moore of Canterbury is a case in point.  Not only did he owe fiduciary duties to his club as its Chief Executive, but he owed similar duties to the League as a director, duties he sought to evade (but only succeeded in implicitly acknowledging) by a resignation, which came after the event (on 1 April 1995).  Mr Moore had not less than an ordinary appreciation of right and wrong.  He knew his duty.  But, stripped of pretence in cross-examination, he was revealed as a man who had been overwhelmed by the magnitude of his temptation.  He could not imagine the money offered to his son-in-law, the Canterbury coach - not to himself - being refused.  He was completely corrupted, and shut his eyes to his obligations to the club and to the League.  But those who suborned the coach, and at least indirectly Mr Moore, were acting with their eyes open.  They knew they were asking officials of clubs to break their contracts (in the case of coaches and other employees) and their duty of fidelity.  They were using the financial power of News Limited to corrupt targeted individuals.

     The secrecy, deceit and suddenness that were intended to be the hallmarks of this assault upon the League are apparent at every turn in the evidence.  An example is the advance preparation of sample questions and answers, to be suggested to players who signed contracts with companies controlled by News Limited.  The object was plainly to prolong deception.  Players were to be encouraged to dissemble their involvement with Superleague.  If asked by a journalist: "Are you in negotiations with News Limited?" it was urged that the answer be given: "There is no point in that, when I have a current contract which I am obliged to honour."

     It is not in doubt that the objective of signing up so many players, at very great expense, together with coaches, and the making of secret arrangements with senior officials of clubs, was to put the clubs and the League itself in a position where there would be nothing they could do but capitulate.  The evidence of Mr Arthurson was unchallenged that Mr Cowley later said to him: "We thought that after we had bought your players that it would have such an effect on you that we would be better able to negotiate with you and come through the front door."  One of the planners engaged by News Limited, Mr Orlay, regarded the descent upon the League's players as an "incentive" for it to accept the terms offered by News Limited and to join in Superleague.  The theory seems to have been precisely that espoused with some pride by President Nixon's special counsel, Charles Colson, in the infamous statement: "When you got 'em by the balls, their hearts and minds will follow". 

     The policy proved successful in the case of a number of the clubs.  They were totally without recourse, having lost
key personnel and being left with teams of players that must have looked to have lost any sense of cohesion except as Superleague teams.  The evidence reveals clubs were told by News Limited that those which did not join Superleague would find rival clubs established in their area.  It is obvious that the setting up of a new club, furnished with a ready made team of top players enticed by the very large offers News Limited had made, and backed by its resources, was an almost immeasurable threat.  The consequence was that on 20 April 1995 heads of agreement and deeds between News Limited, Star League Pty Limited (the chosen vehicle for Superleague), and a number of franchisee companies, were executed, together with documents releasing players from their obligations to their clubs so that they could play for the new franchisee clubs.

     I have described in a little detail the manner in which News Limited went about setting the scene for this case because, in the amended application, discretionary relief is sought, to which conduct must be relevant, and also because there is a number of cross-claims, including claims for the inducement of breach of contract.  The manner in which things were done, especially when no responsible officer of News Limited went into the witness box to proffer any explanation, is plainly relevant, amongst other things, to the question of intent. 

     I must complete the picture by making some reference to the terms of the Superleague documents.  The "Heads of
Agreement" document was expressed to be made between a "Licensee", News Limited and Star League Pty Limited (the Superleague company referred to as SLPL).  The secrecy of the Superleague arrangements was continued even into this agreement, a term of which provided that it was "the confidential information of SLPL", and forbade disclosure of its very existence, except in limited circumstances.  The document provided for the expected surrender of the League by a term stating:

    "SLPL may, to the extent News so determines, progress the Proposal and organise the SLS competition [Superleague competition] in conjunction with the ARFL [Australian Rugby Football League]."

By cl. 4.2 it was provided:

    "News shall be entitled to own the shares in SLPL until the Start Up Costs and any accumulated losses (including funding costs thereof) have been recouped.  Thereafter, if not less than 75% of the SLS licensees so require, the capital of SLPL shall be restructured [there followed complex provisions which it is unnecessary to set out]."

There were provisions giving News Limited the appointment of the chief executive officer and head of marketing, and the composition of the Board of Directors ensured majority control to News Limited.  There was provision for News Limited to receive "an annual management fee ... and ... the cost to News of the services" provided by it.  All intellectual property rights including the logos of the licensees (but not team
names) were to be owned by the Superleague Company.  It was provided by cl. 6.1(a) that:

    "Clubs may be offered participation in the ownership of an SLS Licensee to participate in the Proposal in relation to a Geographic Area."

By cl. 6.2(a) it was provided:

    "SLS Licensees will be initially offered to Current Sydney and Current Non-Sydney Clubs or, in the case of Sydney Licensees to syndicates comprised of one or more Current Sydney Clubs."

By cl. 7.3 it was provided:

    "(a)  The members of the SLS Team will be comprised of the best SLS Players available to the SLS Licensee.

     (b)  In the case of a Sydney SLS Licensee, each Current Sydney Club which forms part of the syndicate owning such Sydney SLS Licensee, will be asked to release any existing players [sic] contracts so as to make all its players available to play in the SLS competition for a Sydney SLS Licensee.

     (c)  Within those requirements, the SLS Licensee will select its SLS team as it thinks fit."

By cl. 7.4, provision was made for a salary cap to be set by the Superleague company as "a maximum amount ... that a SLS Licensee is permitted to spend on the aggregate salaries of its SLS Team".  By cl. 8.1(b) it was provided:

    "Where any SLS Licensee is owned by a syndicate of parties including one or more Current Sydney Clubs,
that SLS Licensee will use its best endeavours to have the Current Sydney Club players contracted as SLS Players with that SLS Licensee."

There was a provision expressly negating any goodwill in the licensee.

     For each target club, the Heads of Agreement were accompanied by a deed executed between News Limited, Star League Pty Limited, the relevant licensee and the rugby league club.  The licensees (which were referred to in argument as AH companies) bore names beginning with those letters - for example, the Penrith licensee was AH PE Pty Limited.  The deed, in each case, recited that the club was party to a number of employment contracts with players (referred to as club contracts) substantially on the terms and conditions of the League's form of playing contract; that the licensee "is party to a number of employment contracts (`SLS contracts') between itself and each of the Players, and has today entered into a form of heads of agreement ... between itself, SLPL and News"; that the club was allotted three club shares in the licensee paid up by News as a gift to the club; that the club was party to the Commitment Agreement and the Loyalty Agreement and pursuant to the Loyalty Agreement "inter alia undertook not to release, waive or otherwise permit or allow the Players to play in any competition other than the National Competition referred to in the Loyalty Agreement"; and that News had instituted proceedings "seeking inter alia a declaration that the Commitment Agreement and/or the Loyalty Agreement are void ab initio pursuant to the Trade Practices Act".  The deed then provides for the club to use its shareholding in a manner likely to ensure performance by the licensee of the Heads of Agreement, and that

    "Club hereby releases and discharges each of the Players from the provisions of any Club Contract or other arrangements with Club to which the Player is party to the extent necessary for such Player to observe or perform his obligations under his SLS Contract (including the Standard Terms referred to therein) as if the Employment Period under his SLS Contract had commenced on 1 January 1996 rather than the date stated in item 4 of the Schedule to the Player's SLS Contract, the intent and effect of such release and discharge being inter alia that the Player may perform his obligations under his SLS contract (including such Standard Terms) on and from 1 January 1996 without breaching his Club contract or other arrangements with Club."

     The deed also contained, subject to certain conditions, a provision that -

    "News hereby agrees with Club to indemnify and keep indemnified Club:

     (i)  from any liability that Club may incur to ARL and or NSWRL under the Commitment Agreement or the Loyalty Agreement [in the case of Penrith there was added: `or any other contract or any joint venture arrangement'] or both by reason of Club entering into and delivering this deed or observing or performing the provisions hereof on its part to be observed or performed;

                           . . ."

A further indemnity, again subject to certain conditions was granted to

    "each of Club's directors and officers (each `Indemnified Party') from any liability that Indemnified Party may incur to ARL, NSWRL, Club, Club's members or any other person by reason of Club entering into and delivering this deed or observing or performing the provisions hereof on its part to be observed or performed ... ."  (Emphasis added.  It will be observed that this appears to be aimed at quietening the fears of directors and officers of clubs in respect of their own derelictions of duty towards their clubs, and the members of their clubs, as well as the League.)

     Employment contracts entered into by the licensees, the AH companies, with the players provide that the employment is upon certain standard terms, and were intended to show a commencement date upon the termination of the player's existing contract with his club.  But there was a provision that upon the player being able to perform his obligations under the agreement -

    "without breaching any agreement (existing at the date of this Agreement) under which the [player] is obliged to play rugby league in the National Competition, then [the licensee] may, in its absolute discretion, by notice to the [player], vary the Employment Period so that it commences on the date specified in the notice (not being a date earlier than one month after the date of the notice)."

There was a provision making the terms, the parties and the very existence of the agreement confidential, and forbidding disclosure unless required by law or with the consent of Star League Pty Limited.  It is interesting to note that, by the standard terms, the relationship between the player and the licensee "is one of employee and employer".  In this respect, the agreement corresponds with the League's form.  But the employment provided for by the Star League Form is full time, extends to "such rugby league football games as the [licensee] may nominate", and involves a negative obligation not to "play rugby league football with any person, team or organisation except [the licensee] or with the prior consent of Star League Pty Limited and [the licensee]".  There is also a detailed ban on participation in any other sport save in carefully defined circumstances.  There is a number of other obligations of a more or less onerous character, and there is a repetition of the confidentiality provision in different terms.

     Following the institution of proceedings by News Limited, and the events which I have described, cross-claims were brought by Australian Rugby Football League Limited and New South Wales Rugby League Limited against News Limited, Star League Pty Limited, the franchisee companies (the AH companies) and certain of the clubs which had aligned themselves with News Limited (Auckland Warriors Rugby League Limited, Brisbane Broncos Rugby League Club Limited, Canberra District Rugby League Football Club Limited, Canterbury-Bankstown Rugby League Club Limited (Sydney Bulldogs Limited was later added to the cross-claim), Cowboys Rugby League Football Limited, Cronulla-Sutherland District Rugby League Football Club Limited, Penrith Rugby League Club Limited and Western Reds Rugby League Football Club Limited).  There was also a second cross-claim brought by a number of the other clubs (South Sydney District Rugby League Football Club Limited, Eastern Suburbs District Rugby League Football Club Limited, St George District Rugby League Football Club Limited, Balmain District Rugby League Football Club Limited, Western Suburbs District Rugby League Football Club Limited, Manly Warringah District Rugby League Football Club Limited, Parramatta District Rugby League Football Club Limited, Gold Coast Seagulls Rugby League Football Club Limited, Illawarra District Rugby League Football Club Limited, North Sydney District Rugby League Football Club Limited, Queensland Crushers Rugby League Football Club Limited and Newcastle Knights Limited) as cross-claimants against News Limited, Star League Pty Limited and the same franchisee companies and clubs aligned with News Limited as are joined as cross-respondents in the first cross-claim.  Additional cross-claims were brought by the clubs aligned with News Limited against Australian Rugby Football League Limited and New South Wales Rugby League Limited. 

     Various issues are raised by this plethora of proceedings.  It is convenient to commence with the application, as amended, in support of which the applicant News Limited relied on its Further Amended Statement of Claim, and to examine first of all a major issue raised by the pleading of certain allegations of breaches, in connection with the Commitment and Loyalty Agreements, of provisions of the Trade Practices Act 1974.

                           MARKET

     After formal allegations, the Further Amended Statement of Claim commences by alleging two markets, and a series of alternative markets.  This was appropriate because the application both of s. 45(2)(a)(ii) (which must be read in the light of s. 45(3)), and also of s. 46, breaches of each of which are alleged, depends upon the existence of a relevant market.  The markets pleaded in the Further Amended Statement of Claim are the following:

1.   A "Rugby League Competitions Market" alleged to have existed at least since 1988 in Australia or alternatively in the Australian Capital Territory, New South Wales and Queensland, being a market for the supply of the service of conducting national premier rugby league competitions, as well as certain representative rugby league competitions, in which a competition organizer supplies, as services to customers, the following:

     (a)  viewing of rugby league matches supplied to members of the public attending the ground and, indirectly, members of the public viewing televised matches;

     (b)  television broadcast rights supplied to broadcast television proprietors;

     (c)  transmission rights supplied to pay television proprietors;

     (d)  broadcast rights supplied to broadcast radio proprietors;

     (e)  intellectual property rights supplied to manufacturers, distributors or sellers of retail products (merchandising rights);

     (f)  sponsorship rights supplied to commercial and other entities.

2.   A "Teams Market", being (over the same period and in the same alternative geographic areas) a market for the supply of teams of premier players suitable for participation in a competition (i.e. a rugby league competition as defined in 1.), in relation to which teams are supplied by corporate clubs for participation in the Rugby League Competitions Market, each corporate club competes for money and prizes, gate receipts, and selling of sponsorship rights, corporate boxes and merchandising rights, and each corporate club competes with each other corporate club, or person wishing to enter a team to participate in a competition, in various ways set out in the pleading including seeking players, sponsorship arrangements, supporters, spectators and purchasers of merchandise.

3.   A "League Market", which is pleaded in the alternative in respect of the same period and the same alternative geographic areas, being a market for the supply of a rugby league competition as defined, in which the participants include (a) teams of suitable premier players supplied by corporate clubs and (b) a competition organizer or organizers who provide the service of conducting a competition together with the services alleged to be provided in the Rugby League Competitions Market.

4.   Alternatively, a series of markets is pleaded as existing during the same period and in the same alternative geographic areas, as follows:

     (a)  for the supply of a Competition (as defined) for viewing by members of the public (this was said to embrace both viewing at the ground and viewing by television); or

     (b)  for television broadcast rights in respect of a Competition for supply to broadcast television proprietors; or

     (c)  for transmission rights in respect of a Competition, supplied to pay television proprietors; or

     (d)  for sponsorship rights in respect of a Competition, supplied to commercial and other entities; or

     (e)  in relation to any one or more of (a) to (d).

     The most striking aspect of each of the markets alleged by the applicant is that it is confined to rugby league: none embraces any other sport or form of entertainment.

     The term "market" adopted by the Act (and picked up by the pleading) is a term of art in this area of law and economics.  Its meaning does not equate with any of the concrete or metaphorical meanings of the word in other uses.  Yet it was a fitting word to be adopted just because of the connotations it already had.  When, in As You Like It (Act III, Scene 5), Rosalind declared sarcastically that Phoebe should sell while she could since she was "not for all markets", the jibe focused on the features required for the success of a "product" in the relevant (in this case, marriage) market.  The lady, it was suggested, lacked the qualities to be competitive in that market, though Shakespeare's rendition is more interesting!  What is important for present purposes is that competition is indeed the key.  In the area of economics concerned with the operation of competition, and for the purposes of the Act, a market is to be understood in the way expounded by the Trade Practices Tribunal (Woodward J., President; Shipton and Brunt, Members) in Re Queensland Co-operative Milling Association Ltd (1976) 8 ALR 481, a decision cited approvingly in the joint judgment of Mason C.J. and Wilson J., and also by each of Dawson J. and Toohey J., in Queensland Wire Industries Proprietary Limited v The Broken Hill Proprietary Company Limited (1989) 167 CLR 177.  The Tribunal said (at 517):

    "A market is the area of close competition between firms or, putting it a little differently, the field of rivalry between them (if there is no close competition there is of course a monopolistic market).  Within the bounds of a market there is substitution - substitution between one product and another, and between one source of supply and another, in response to changing prices.  So a market is the field of actual and potential transactions between buyers and sellers amongst whom
there can be strong substitution, at least in the long run, if given a sufficient price incentive.  Let us suppose that the price of one supplier goes up.  Then on the demand side buyers may switch their patronage from this firm's product to another, or from this geographic source of supply to another.  As well, on the supply side, sellers can adjust their production plans, substituting one product for another in their output mix, or substituting one geographic source of supply for another.  Whether such substitution is feasible or likely depends ultimately on customer attitudes, technology, distance, and cost and price incentives. 

          It is the possibilities of such substitution which set the limits upon a firm's ability to `give less and charge more'.  Accordingly, in determining the outer boundaries of the market we ask a quite simple but fundamental question: If the firm were to `give less and charge more' would there be, to put the matter colloquially, much of a reaction?"

See too Arnotts Limited v Trade Practices Commission (1990) 24 FCR 313 at 328-329 and Davids Holdings Pty Limited v Attorney-General of the Commonwealth (1994) ATPR 41-304 at 42,081, where Full Courts adopted this passage, and Dowling v Dalgety Australia Limited (1992) 34 FCR 109 at 130-131, per Lockhart J.

     Although the role of the market in which the competitive contest takes place is thus crucial to an understanding of the forces at work in competition, the concept of a market has been seen as somewhat protean.  In Queensland Wire Industries (at 195) Deane J. said that

    "the word [market] is not susceptible of precise comprehensive definition when used as an abstract noun in an economic context.  The most that can be said is that `market' should, in the context of the Act, be understood in the sense of an area of
potential close competition in particular goods and/or services and their substitutes".

He went on (at 196) to refer to the involvement of "value judgments about which there is some room for legitimate differences of opinion"; to the phenomenon of overlapping of markets; and to the blurring of their outer limits.  Similarly, Dawson J. said (at 199): "A question of degree is involved - at what point do different goods become closely enough linked in supply or demand to be included in the one market - which precludes any dogmatic answer".  In Singapore Airlines Limited v Taprobane Tours WA Pty Ltd (1991) 33 FCR 158 at 167, French J. (with whom Spender and O'Loughlin JJ. agreed) referred to a passage from the report of the Swanson Committee containing the statement: "No definition could produce a formula capable of certainty, having regard to the variable nature of the factors ... ."  It seems that our formulation of the market should be sufficiently flexible to bend to accommodate the particular situation or process to which it may have to be applied: Singapore Airlines; Queensland Wire Industries (at 195-196); Eastern Express Pty Limited v General Newspapers Pty Limited (1992) 35 FCR 43 at 59; Re John Dee (Exports) Pty Ltd (1989) ATPR 40-938 at 50,219; Australia Meat Holdings Pty Limited v Trade Practices Commission (1989) ATPR 40-932 at 50,104.  Cf. Trade Practices Commission v Australia Meat Holdings Pty Ltd (1988) 83 ALR 299 at 316.  That does not mean that the word "market", as used in the decisions, is devoid of content; rather its content will be affected - but in a predictable way - by its application.  In Queensland Wire Industries, where the power of Broken Hill Proprietary rendered precise definition unnecessary since, however widely the market boundaries might be set, the company had overwhelming market power, the judgments in the High Court make it quite clear that the Act is concerned with markets that are real and are the source of liability.  They are not just theoretical models.  Toohey J. put it explicitly (at 209):

    "The existence of a market is vital to anyone seeking to invoke s. 46.  Unless a corporation takes advantage of the power it holds in a market, there can be no contravention of the section."

Similarly, Dawson J. (at 200) said "the extent of market power cannot be assessed otherwise than by reference to a market".  See also the remarks of Gummow J. in General Newspapers Pty Limited v Telstra Corporation (1993) 45 FCR 164 at 198.

     The term "market" encapsulates the area within which competitive forces operate upon an undertaking (the subject of the enquiry), and its use implies the deployment of a method of economic analysis for the better understanding of those forces in order to solve the problem at hand.  Just because it is of this nature, the concept can only be understood in relation to the idea of competition, itself a complex notion in this field of law and economics.  The interaction between the ideas of competition and market is starkly revealed in the following passage from the Tribunal decision (Keely J., Deputy President; Shipton and Brunt, Members) in Application by Tooth & Co Ltd; Application by Tooheys Ltd (1979) ATPR 40-113 at 18,196:

    "[C]ompetition may proceed not just through the substitution of one product for another in use (substitution in demand) but also through the substitution of one source of supply for another in production or distribution (substitution in supply).  The market should comprehend the maximum range of business activities [emphasis added] and the widest geographic area within which, if given a sufficient economic incentive, buyers can switch to a substantial extent from one source of supply to another and sellers can switch to a substantial extent from one production plan to another.  In an economist's language, both cross-elasticity of demand and cross-elasticity of supply are relevant."

Whenever the implications of this interaction are not heeded, the identification of too narrow or too broad a market will completely distort the picture gained of the competitive forces at work.  If the market is seen as the frame, too broad a market will produce a picture in which the identity of the competitive conflict is lost in a confused mêlée involving other conflicts, while too narrow a market will cut out of the picture vital parts of the very action intended to be depicted.  Either way, the processes at work will not be fairly exposed to view.

     It would be simplistic and misleading, in many cases, to see the market as confined to the product produced by the undertaking in question.  The Act, following economic theory, embraces also, and was deliberately amended in 1977 to ensure that it did so, "other goods or services that are substitutable for, or otherwise competitive with" that product.  See s. 4E.  As a matter of statutory interpretation, the addition of the words "or otherwise competitive with" emphasizes, as does the whole provision added by the amendment, the legislative intention to specify a wider rather than a narrower market.  There is good reason for this, since too narrow a delineation of the market will exaggerate the power of a relatively large firm in it, perhaps bringing down on that firm, inappropriately, harsh sanctions so as to cripple its ability to compete in the wider real market in which it actually does business.  The Act would then be turned into an instrument for strangling competition rather than enhancing it. 

     As a matter of economic theory, the concept of substitutability expresses the basis on which competition may in reality, at least potentially, and at least in the long run, cover a wider field than that marked out by dealings in a particular product.  Here, it is very important to remember the purpose of the exercise.  A market, I have suggested, is to be identified as the frame within which the picture of competitive forces may be clearly seen.  Since too narrow a frame will exclude part of the action to be observed, it is essential that the market be sufficiently broadly delineated; hence the statement I have emphasized in the passage quoted from Tooth; Tooheys.  The whole passage is completely in accord with an understanding of the market which Prof. P.L. Swan described in The Law and the Market (1995), ed. M. Richardson and P.Williams, at 60 as "traditional".  It has been widely accepted.  Just after that passage, the Tribunal underlined the breadth of the approach that is required when it added:

    "It is plain that the longer the period allowed for likely customer and supplier adjustments to economic incentives, the wider the market delineated.  In our judgment, given the policy objectives of the legislation, it serves no useful purpose to focus attention upon a short run, transitory situation.  We consider we should be basically concerned with substitution possibilities in the longer run.  This does not mean we seek to prophesy the shape of the future - to speculate upon how community tastes, or institutions, or technology might change.  Rather we ask of the evidence what [would be] likely to happen to patterns of consumption and production were existing suppliers to raise price or, more generally, offer a poorer deal.  For the market is the field of actual or potential rivalry between firms."

With this may be compared the language of the former New Zealand Commerce Commission cited in Singapore Airlines (at 169) referring to a market as "a field of actual or potential transactions between buyers and sellers amongst whom there can be strong substitution, at least in the long run, if given a sufficient price incentive."  The decision of the Full Court in Singapore Airlines may be seen as an application of the concept of substitutability.  In that case, French J. said (at 178) that market definition was

    "a focusing process and the Court must select what emerges as the clearest picture of the relevant competitive process in the light of commercial reality and the purposes of the law."

     Commercial reality would be overlooked if substitutes, whether immediate or potential, were overlooked.  Their existence significantly restrains the market power of an undertaking.  "[E]conomically meaningful markets", as is stated in the United States Merger Guidelines (1984) quoted by Prof. Brunt in her article "Market Definition" Issues in Australian and New Zealand Trade Practices Litigation (1990) ABLR 86 at 101 (the proposition was repeated in s. 1 of the Department of Justice and Federal Trade Commission Horizontal Merger Guidelines issued 2 April 1992), are "markets that could be subject to the exercise of market power".  The idea in economic theory is that a market is an area within which one firm or a combination, dominating production of the relevant product, could exercise market power without being restrained by the attraction of competitive intervention from firms producing substitutable products.  See General Newspapers Pty Limited v Telstra Corporation (supra, at 181).  As Mason C.J. and Wilson J. said in Queensland Wire Industries (supra, at 188), referring to Re Queensland Co-operative Milling Association Ltd (supra, at 517), "the defining feature of a market is substitution".  See also John S Hayes & Associates Pty Limited v Kimberly-Clark Australia Pty Limited (1994) ATPR 41-318 at 42,229; Arnotts Limited v Trade Practices Commission (supra, at 329, 331-333).

     In some cases, the term "submarket" has been used to refer to a "hot spot" of especially intense competition within a market.  When the aim is to analyse and to understand the competitive forces at work in a particular market, the identification of a submarket within it may prove useful, particularly with respect to the examination of short run phenomena.  But a submarket is by definition narrower than the market of which it is part.  Liability under the Trade Practices Act turns on the existence of a market within the meaning of the Act.  See the discussion by Prof. Baxt in The Law and the Market (supra) at 17 et seq.  Unless, in a particular instance, the word "submarket" is used to refer to a market not narrower than this meaning, it will not identify that with which the Act is concerned.  In Singapore Airlines, French J. said (at 181) of "submarket" as a term employed in economic and legal discourse:

    "In the context of Australian anti-trust law it has no explicit statutory role, but refers to an area of competition narrower than a market and intended as a tool of analysis rather than an element of a legal standard of liability."

He referred to the article by Prof. Brunt mentioned above.  In that article, having pointed out (at 117) that "the Australian concept [of a submarket] is different from the American", seeing it "as a tool of analysis and not as an element of a legal standard to attract liability", Prof. Brunt says (at 119):

          "By contrast, in United States antitrust litigation a `sub-market', narrower than a `market', may attract liability, as occurred in the Aspen case where Aspen Skiing Corp. was found to have monopolised the market for downhill skiing services
at Aspen in violation of s. 2 of the Sherman Act.  The trial judge instructed the jury:

         `There can be both a relevant market and a relevant submarket or just a relevant market without any relevant submarket.  Thus, if you decide that the relevant product market is downhill skiing at destination ski resorts, you must still determine whether downhill skiing services in Aspen, including multi-area, multi-day lift tickets is a submarket within a larger market.'

     And frequently the construction is used to evade a positive finding of the degree of substitutability in a particular case: whether a `market' or `sub-market' is identified, defendant is still guilty!

          Perhaps, in the circumstances, there would be an argument for Australian practice to change its terminology-to refer to `market sub-groupings' or `market segments'.  But it would be unfortunate if American criticisms of the confusion generated by their concept were to lead us to abandon our own."

While both the Australian legislature and our courts have borrowed heavily from United States theory and practice in the antitrust area, these comments provide a salutary warning against too ready an acceptance of authorities which may rely on an extended understanding of the market concept that is alien to our Act.

     It will not do to try to avoid the logic of Prof. Brunt's comments by referring to overlapping markets rather than to submarkets.  The name alters nothing.  Certainly, as I have mentioned, there are overlapping markets, and the real state of things may be quite complex: Queensland Wire Industries (supra, at 196); General Newspapers Pty Limited v Telstra Corporation (supra, at 199).  An appreciation of this complexity will be enhanced if it is remembered that the market situation is not static but dynamic, and is apt to change even while it is being observed and analysed, as prevailing fashions, taste and technologies change.  But each fresh market relied on as a source of liability under the Act must meet the criteria for recognition as a market for the purposes of the relevant provision of the Act.  However clearly a market contained, or partly contained, within a wider market may be capable of identification for some purposes, if it fails to "comprehend the maximum range of business activities ..." referred to in Tooth; Tooheys and required to be covered by s. 4E, if it would be affected by substitution possibilities in the longer run so as not to be an "economically meaningful market" that "could be subject to the exercise of market power", if in short it fails the test of what Mason C.J. and Wilson J. called "the defining feature ... substitution", it is no market for the purposes of liability under ss. 45 and 46.  Should a contained market be nevertheless recognized in a particular case, there would be a likelihood, just because of its falling within a wider market, that an absence of realistic barriers to entry would remit the Court to the same considerations, as regards market power within the meaning of s. 46, which would be relevant in relation to the wider market.

     The authorities I have been discussing recognize that in economics, as in other areas, theoretical models are not always (if ever) replicated precisely by reality.  Questions of degree are involved, and value judgments must be made about which among conflicting influences should be accorded weight in the ultimate conclusion.  The competition that is our concern is close competition, not to be assessed according to any fixed measure, but by an exercise in judgment, and having regard to the statutory purpose the Court is endeavouring to carry out.  Effects that are relevant are significant effects.  And the perceptions of those engaged in the particular area of commercial activity may provide guidance.  These things have been stated many times, but it is sufficient to refer for authority to the recent Full Court decision in Davids Holdings Pty Limited v Attorney-General of the Commonwealth (supra).

     In the article referred to, Prof. Brunt also states (at 96) some principles bearing upon the role of competition, which underline the importance, discussed above, of taking a broad view, and a long view, of the market.  She says:

          "Competition is a process rather than a situation.  Dynamic processes of substitution are at work.  Technological change in products and processes, whether small or large, is ongoing and there are changing tastes and shifting demographic and locational factors to which business firms respond.  Profits and losses move the system: it is the hope of supernormal profits and some respite from the `perennial gale' (J.A. Schumpeter's phrase: see Capitalism, Socialism  and Democracy (2nd ed., 1947), p. 87) that motivates firms' endeavours to discover and supply the kinds of goods and services their customers want and to strive for cost-efficiency.  Such a vision tells us that effective competition is fully compatible with the existence of strictly `limited monopolies' resting upon some short run advantage or upon distinctive characteristics of product (including location).  Where there is effective competition, it is the on-going substitution process that ensures that any achievement of market power will be transitory.

          This is the manner in which one would hope that the courts will interpret the reference to `constraints' contained within the `monopolisation' provisions of the two Acts (s. 46(3) of the Trade Practices Act and s. 3(8)(b) of the Commerce Act [the New Zealand competition law]), namely as long run dynamic constraints."

     If these principles are to be applied in the setting in which rugby league operates in Australia, it must be kept in mind that the game has achieved its present measure of pre-eminence in New South Wales and Queensland only in the last decade, and particularly the latter part of the decade.  At the same time, it has encountered problems which are partly the consequences of its very successes, and partly of demographic changes in the inner city areas of Sydney that were once its heartland.  Its response to the challenge of those problems does appear to have been hesitant.  But the question is whether that is because rugby league is controlled by a monopoly in a narrow market, or whether, despite the long run competitive forces in a wider market, there are factors which account, in the short run, for a relatively slow pace of change.  Like, for example, those in charge of a church hospital, the board of the League is motivated in large part by considerations other than the pursuit of profit.  It is concerned with the preservation and enhancement of the traditions of the game, just as the hospital has a religious and moral mission - the Good Samaritan delayed his business, and expended some of his funds, to serve a higher duty.  So lack of effective competition from other sports (at least in the long term) is not necessarily the reason the League has hesitated to jettison its weaker clubs before they have had an opportunity to recover.  The economists' market, like Thackeray's Vanity Fair (as the author stated in his prologue "Before the Curtain") is "not a moral place certainly", but it must take account nevertheless, if it is to accord with reality, of those moral considerations that do impinge on the forces operating within it.  In so putting the matter, I adopt in substance the view expressed in Prof. H.M. Kolsen's report in this case.  As he has pointed out, it is necessary too to take account of the co-operation between the clubs inherent in a sporting competition, and of the interdependencies between all the clubs and the League, as factors affecting economic judgments upon their actions.

     There has been a response by the League, if less than precipitate, to demographic changes and to the consequential weakening of clubs.  The Newtown club, despite all the appeal of sentiment, was not propped up against its competitive inadequacy.  Wests was compelled by the League to find support, in order to face the "perennial gale", in relocation at Campbelltown.  This move was no erection of a monopolistic shelter; it was rather a strengthening of the competitive structure of the club.  Similarly, Balmain (as it used to be called) has been reinvigorated by measures specifically designed to enable it to compete on a larger scale, and more effectively, by a broadening of its appeal to a wider region than its demographically shrinking birthplace.  And there have been repeated calls for amalgamation of clubs in the longer term.  The swollen competition of 20 teams, which, according to the argument put on behalf of News Limited, shows a monopolist's control of a narrow market, confined to rugby league, may be seen, to the contrary, as evidence of vigorous activity in a market that actually includes the Australian rules football, rugby union, soccer or basketball, not to mention cricket, played in the places where the expansion of the competition has introduced a stronger presence of rugby league.  A mere decade into the great changes that have occurred in rugby league, it may be quite wrong to see the conduct of its administration as evidence of freedom from the kind of "long run dynamic constraints" the existence of which would indicate it was indeed operating within a wide market.

     For similar reasons, the attack based on the proposition that television rights were sold too cheaply by the League seems to me quite misconceived.  It was pointed out by counsel for the League that to sell too cheaply is not usually considered a badge of monopoly.  But the true refutation of the attack is provided by the nature of the League itself.  It has a great interest in promoting the game, especially in Australia, and therefore in securing for it the best possible television coverage.  Its objective in respect of television is not simply to get the highest price.  On the evidence, at the time the arrangements with Channel 9 were made, the League had reason to be very dissatisfied with the way its interests had been served by the previous telecaster, Channel 10, which had been in serious financial difficulties.  There was a need to secure suitable and viable long-term promotion of the game, as well as income, by entering into a new television contract.

     The argument presented for News Limited placed significant weight on the decision of the European Court of Justice in United Brands Company v The Commission of the European Communities [1978] 1 CMLR 429.  There, a single product market in bananas was recognized.  But it is necessary to look at the reasoning of the Court.  One should not jump to the conclusion that the fundamental principle of substitutability was read down to a cipher, so that each kind of fruit, such as apples, oranges and peaches, was required to be seen as being in a separate product market.  On the contrary, the Court recognized a fresh fruit market, but distinguished bananas, and only bananas, from that market for reasons quite special to the trade in bananas in the European Communities.  The Court accepted (at 482) the proposition that "the relevant market consists solely of the banana market ... and is a market sufficiently homogeneous and distinct from the market of other fresh fruit".  It will be seen that individual preferences for the different types of fruit, for example grapes or strawberries, did not prevent them falling within one market "of other fresh fruit".  (Cf. Arnotts Ltd (supra) at 333-334.)  The reasoning supporting this decision is set out, at too great length to be repeated here, at pp. 482-484 of the report.  The Court referred (at 483) to "studies of the banana market" showing that "there is no significant long term cross-elasticity any more than ... there is any seasonal substitutability in general between the banana and all the seasonal fruits, as this only exists between the banana and two fruits (peaches and table grapes) in one of the countries (West Germany) of the relevant geographic market."  The Court found that

    "a very large number of consumers having a constant need for bananas [it instanced "the very young, the old and the sick", and found that the banana was throughout the year "always available" in Europe] are not noticeably or even appreciably enticed away from the consumption of this product by the arrival of fresh fruit on the market and that even the seasonal peak periods only affect it for a limited period of time and to a very limited extent from the point of view of substitutability". 

These quotations suffice to indicate that the Court's conclusion was based on a very strong and special factual situation.  From the point of view of principle, what is important about the decision is that the Court made it clear only these or comparable very strong and special facts could have justified it.  The Court stated (at 482-483):

          "For the banana to be regarded as forming a market which is sufficiently differentiated from other fruit markets it must be possible for it to be singled out by such special features distinguishing it from other fruits that it is only to a limited extent interchangeable with them and is only exposed to their competition in a way that is hardly perceptible."

The words "hardly perceptible", in this passage, give extraordinary emphasis to the proposition I have earlier quoted from Tooth; Tooheys that "[t]he market should comprehend the maximum range of business activities ... within which, if given a sufficient economic incentive, buyers can switch to a substantial extent from one source of supply to another and sellers can switch to a substantial extent from one production plan to another".  The statement of principle made by the European Court of Justice is quoted in full, and approvingly, by Mason C.J. and Wilson J. in Queensland Wire Industries (at 188) in the course of a discussion of the legislative direction in s. 4E requiring a market to be defined by substitution.

     Counsel for News Limited also placed considerable weight on a selection of United States decisions.  It was claimed that these decisions established the existence of a market no wider than the market for a particular sport, such as American football, and also established that there is a broadcasting rights market that "is properly seen as a submarket or submarkets which in no sense derogate from the principal market, which is the market for the exhibitions of games themselves".  There are a number of points that should be made at the outset of an examination of the American decisions.  In the first place, the complexity and range of forms of entertainment available in the United States must be taken into account.  For baseball alone, Toolson v New York Yankees, Inc. (1953) 346 US 356 at 358 shows that, as long ago as 1951, there were 52 different leagues with 380 clubs operating in 42 different States, the District of Columbia, Canada, Cuba and Mexico.  There is, too, in the United States a great number of radio and television channels devoted to particular segments of the overall entertainment industry.  If numbers of stations broadcast only American football, it is easy to understand the view that there is a market for selling rights to broadcast American football matches.  Buyers who are the operators of stations broadcasting nothing else may well be said to be buying a product for which the right to broadcast a different sport, such as baseball, is not substitutable.  In the next place, some of the American cases may be concerned, under American law, with per se violations of the Sherman Act not requiring any allegation of injury to competition in a relevant product and geographic market: see Piazza v Major League Baseball (1993) 831 F Supp 420 at 429.  But cf. Mid-South Grizzlies v National Football League (1982) 550 F Supp 558 at 566.  In those cases where the American court was required to make a finding based on the existence of a market, its view about the effect of a submarket may have been significant; in this regard, it is necessary to bear in mind the warning issued by Prof. Brunt in the article to which I have already referred.  The Australian law is different.  I note that the submission formulated by counsel for News Limited about the American view of a broadcasting rights market seems to be squarely based on the proposition that this market is, in the American sense, a submarket.  A further general difference from the Australian legal position, to be found in American authorities, is the "Rule of Reason".  This has no counterpart here.  The American court must "determine whether the restraint imposed merely regulates and thereby promotes competition or is one that may suppress or destroy competition": Mid-South Grizzlies (supra, at 567).  The existence of the Rule of Reason may influence the interpretation of the facts made by an American court.  If a market is too narrowly drawn, in our terms, by the American court, no harm will be done because the Rule of Reason will enable the true effect of a relevant restraint to be examined and identified under that rule.  The market may be differently stated, but the effect on the ultimate decision, in a case where the Rule of Reason is applied positively, is the same, since a major function of the Australian market definition is to avoid treating as anti-competitive, in a narrowly delineated market, what is really a regulation designed to achieve a competitive strengthening in one sector of a wider market.  As to the relationship I have suggested between the narrowness of a market definition and the Rule of Reason, see the comments of Prof. Baxt in The Law and the Market (supra) at 23, 31.

     It was put by counsel for News Limited that the "starting point is the decision of the United States Supreme Court in International Boxing Club of New York Inc v United States 358 US 242 (1959)".  The Court quoted (at 249) from the landmark authority United States v du Pont & Co (1956) 351 US 377, where it was said that "no more definite rule can be declared than that commodities reasonably interchangeable by consumers for the same purposes make up that `part of the trade or commerce,' monopolization of which may be illegal".  What was at issue was a finding by the District Court that the relevant market, at which a conspiracy was aimed, was not the entire field of professional boxing, but a market in championship contests alone.  The Court held (at 251):

    "[W]e cannot say that the lower court was `clearly erroneous' [the test required to reverse the finding of the court below] in concluding that nonchampionship fights are not `reasonably interchangeable for the same purpose' as championship contests.  A determination of the `part of the trade or commerce' encompassed by the Sherman Act involves distinctions in degree as well as distinctions in kind."

The Court also referred (at 252) to prior decisions in which it had been held that s. 1 of the Sherman Act outlawed "unreasonable restraints irrespective of the amount of trade or commerce involved" and that s. 2 "condemns monopoly of `any part' of trade or commerce".  Although, in United States v du Pont & Co the Court had concluded that the relevant market was not cellophane alone but the entire field of flexible packaging materials, and this decision was not questioned, on the findings of fact made in the District Court in the instant case, only championship boxing matches constituted the market.  It does not seem to me that the Supreme Court's inability to declare these findings "clearly erroneous" establishes any new principle.

     The next case in the Supreme Court referred to was Radovich v National Football League (1957) 352 US 445.  However, it was acknowledged that in this case "no question was raised as to the delineation of the market".  The Court was concerned with whether the pleading of an antitrust suit was adequate, and it expressed no opinion on the validity of the claims made.

     Then I was referred to National Collegiate Athletic Association v Board of Regents of the University of Oklahoma (1984) 468 US 85.  This case concerned a plan adopted by the NCAA in respect of the telecasting of football games played by member institutions.  Under the plan, a television committee awarded to two networks certain rights to negotiate and contract for the telecasting of college football games.  There was provision for some additional telecasting.  Agreements covering a four years period were made with the networks for an aggregate sum of over $130 million.  By the terms of the plan, the total amount of televised intercollegiate football, and the number of games that any one team might arrange to have televised, were limited, and no member was permitted to make any sale of television rights except in accordance with the plan.  The District Court held that these controls over the televising of college football violated the Sherman Act.  When the case reached the Supreme Court, the majority held (at 104):

          "Because it restrains price and output, the NCAA's television plan has a significant potential for anticompetitive effects."

It went on (at 109-110) to hold:

          "As a matter of law, the absence of proof of market power does not justify a naked restriction on price or output.  To the contrary, when there is an agreement not to compete in terms of price or output, `no elaborate industry analysis is required to demonstrate the anti-competitive character of such an agreement.'  ...  Thus the plan is inconsistent with the Sherman Act's command that price and supply be responsive to consumer preference.  We have never required proof of market power in such a case.  This naked restraint on price and output requires some competitive justification even in the absence of a detailed market analysis."

However, they also held (at 112) that college football broadcasts should be defined "as a separate market".  This was because of the "generic qualities differentiating viewers".  In relation to that matter, the justices had said (at 101-102):

    "Moreover, the NCAA seeks to market a particular brand of football - college football.  The identification of this `product' with an academic tradition differentiates college football from and makes it more popular than professional sports to which it might otherwise be comparable, such as, for example, minor league baseball.  In order to preserve the character and quality of the `product,' athletes must not be paid, must be required to attend class, and the like."

It will be observed that this reasoning appears to recognize that the professional sports referred to might be otherwise comparable to the amateur football in question, and thus professional football and baseball in the United States might presumably, at least for some purposes, constitute the one market.

     As I have mentioned, the decision was reached by majority.  A dissenting judgment was published by White J., with whom Rehnquist J. (as he then was) joined.  White J. (at 131-132) said that he found the majority's proposition based "on the ground that college football is a unique product for which there are no available substitutes" to be "singularly unpersuasive".  He continued:

    "It is one thing to say that `NCAA football is a unique product' ... , that `intercollegiate football telecasts generate an audience uniquely attractive to advertisers and that competitors are unable to offer programming that can attract a similar audience.' ...  It is quite another, in my view, to say that maintenance or enhancement of the quality of NCAA football telecasts is unnecessary to enable those telecasts to compete effectively against other forms of entertainment.  The NCAA has no monopoly power when competing against other types of entertainment.  Should the quality of the NCAA's product `deteriorate to any perceptible degree or should the cost of "using" its product rise, some fans undoubtedly would turn to another form of entertainment ....  Because of the broad possibilities for alternative forms of entertainment,' the NCAA `properly belongs in the broader "entertainment" market rather than in ... [a] narrower marke[t]' like sports or football."

White J. also went on to comment (at 133) on the failure of the court below to "reject the factual premise of the NCAA's argument that the plan might enhance competition by increasing the market penetration of NCAA football".  I find the reasoning of the dissentients powerful.  At any rate, it raises issues that could justify a finding of a wider market upon the tests adopted by Australian law as formulated in Re Queensland Co-operative Milling Association Ltd (supra) and Tooth; Tooheys (supra).  In particular, if the provision of inferior products would lead customers to turn to particular substitute products, that would normally indicate that both products are in the same market for the purposes of the Trade Practices Act.

     An interesting American case is the decision of the United States Court of Appeals, Second Circuit, in North American Soccer League v National Football League (1982) 670 F 2d 1,249.  There, the professional soccer league sued the professional football league, alleging violation of the Sherman Act by the football league's ban on its members owning teams in competing leagues.  The judgment of the appellate court stated (at 1,251) that the National Football League was

    "an unincorporated joint venture consisting of 28 individually owned separate professional football teams ... which is engaged in the business of providing public entertainment in the form of competitive football games between its member teams."

It referred (at 1,256) to the ruling of the District Court that competition between the individual National Football League teams and the individual North American Soccer League teams "for the consumer's dollar in their respective localities" was "subsumed in league versus league competition in the general entertainment market".  The Court pointed out (at 1,260) that the decision below had not defined the scope of the market; and the Court came to its own conclusion, which it expressed as follows:

    "The record thus reveals a market which, while not limited to existing or potential major sports team owners, is relatively limited in scope and is only a small fraction of the total capital funds market.  The evidence further reveals that in this sports capital and skill market owners of major professional sports teams constitute a significant portion."

Thus it was held that there existed a capital and skill market in which the National Football League and the North American Soccer League were in competition with each other, each being a sports league.  There was no suggestion that this market was too broad in the respect that it should be divided into markets limited to single sports. 

     Following the decision of the United States Court of Appeals for the Second Circuit, an application was made to the Supreme Court for certiorari, which was denied: National Football League v North American Soccer League (1982) 459 US 1,074.  The only judgment that appears to have been delivered in the Supreme Court is the dissenting judgment of Rehnquist J.,  who would have granted certiorari because he questioned whether the Rule of Reason had been violated.  In the course of expounding his views on that matter, he said (at 1,077):

          "The NFL owners are joint venturers who produce a product, professional football, which competes with other sports and other forms of entertainment in the entertainment market."

     I was referred to a number of other decisions of courts below the level of the Supreme Court of the United States, not all of which seemed to me to be of assistance on the issue of market delineation.  In Philadelphia World Hockey Club, Inc v Philadelphia Hockey Club, Inc (1972) 351 F Supp 462, a Federal District Court was concerned with a dispute between professional hockey leagues, in which it was alleged that the National Hockey League had violated antitrust laws in its efforts to preclude players from joining teams in the rival league.  The Court found the relevant market to be major league professional hockey.  The Judge referred (at 501) to Supreme Court authority for the proposition that, within a product market "determined by the reasonable interchangeability of use or the cross-elasticity of demand between the product itself and substitutes for it", there might also exist "well-defined, submarkets ... which, in themselves, constitute product markets for antitrust purposes".  This passage plainly raises the question the subject of Prof. Brunt's remarks about submarkets quoted earlier in these reasons.  But, in any event, the decision is concerned with the analysis of a restriction of a special kind.  Obviously, the players of hockey are not competing, for places in professional hockey teams, against other persons who are players of basketball or football; they are only competing against other hockey players.  Similarly, hockey clubs do not compete for players against basketball clubs or football clubs.  Accordingly, a market confined to hockey is easy to comprehend in the context of this case.  The Judge, on the evidence, thought also that major league players were, as he said (at 502), "not interchangeable products" with minor league players.  This presumably was on the basis of a very significant difference in skill.

     United States Football League v National Football League (1986) 644 F Supp 1,040 was a decision of a District Judge of the United States District Court of the Southern District of New York.  It concerned the appropriate orders consequential upon the verdicts of a jury which had dismissed a number of antitrust claims, but had, on one claim of monopolization, found (as the Judge said at 1,042) "that defendants had willfully acquired or maintained monopoly power in a relevant market consisting of major league professional football in the United States", awarding nominal damages of $1.  On a motion by the defendants for judgment, the District Judge held (at 1,057) "that the jury could reasonably have concluded that the business of professional football constituted a relevant product market", although it appears from his discussion (at 1,056) that the plaintiffs had failed to show monopolization in any of the separate areas of sale of broadcast rights, sale of spectator tickets, etc, which had been in contention. 

     The case went on appeal, as United States Football League v National Football League (1988) 842 F 2d 1,335, to the United States Court of Appeals, Second Circuit.  The appeal had been brought by the plaintiffs, whose verdict for nominal damages left them substantially unsuccessful.  A cross-appeal was lodged only against the event of allowance of the appeal, and the appeal being dismissed, was not considered.  Although the judgment of the appellate court is lengthy, it really has little to say about the principles of United States law governing the delineation of a market for antitrust purposes.  The decision turned on whether there was available to the appellants any argument that required the setting aside of any of the jury's decisions.  On that question, much of the discussion in the appeal judgment is concerned with a direction, given by the trial judge, that a particular finding required "unambiguous evidence".  Accepting that this direction should have been qualified, the appellate court held that it was unlikely to have affected the verdicts, and that in any event objection to it had been waived.  What is more significant for the purposes of the present case is that the appellate court found no fault with the following directions, which it quoted (at 1,362-1,363):

    "In this case plaintiffs allege the existence of a relevant submarket in the nation-wide market for the sale of network television broadcasting rights for major league professional football games in the fall.

          Defendants dispute plaintiffs' definition of the relevant submarket in at least two respects.  First, the defendants contend that the buyers of broadcast rights are not limited to television networks.  ... 

          Second, the defendants say that the relevant submarket is not limited to the sale of rights to telecast professional football in the fall, but should instead include the sale of broadcast rights for other sports programming, such as college football, and for other general entertainment programming.  In order for plaintiffs to prove that their definition of the relevant submarket is
correctly limited to the sale of broadcasting rights for professional football in the fall, plaintiffs  must show that the purchasers of those rights did not regard other types of programming as reasonably interchangeable substitutes for professional football.

          In other words, you have to decide whether ... broadcasting rights to professional football in the fall compete as a product with broadcasting rights for other sporting events and other television programming.  If you find that such competition does exist, then you have necessarily found that the relevant submarket is broader than the plaintiffs have alleged.  If, on the other hand, you find that the sale of broadcasting rights for professional football in the fall is a specific universe, and that the buyers of those rights do not have reasonably interchangeable substitutes, then you have necessarily found that plaintiffs are correct in having limited the relevant submarket to the sale of broadcasting rights for professional football in the fall."

     The jury, so directed, "did not find the NFL liable on any of the USFL's television-related claims", as the Court noted at 1,379.  At the very beginning of its judgment, the Court itself had indicated (at 1,340) that it did not see the National Football League as something unique and alone, but as classifiable within the entertainment market, for it called the League "a highly successful entertainment product".

     I was also referred by counsel to Fishman v Wirtz (1986) 807 F 2d 520, a majority decision of the United States Court of Appeals for the Seventh Circuit in a case which, according to a footnote at 520, appears ultimately to have been settled.  In that case, the District Court had found, as the majority stated at 531, that

    "the relevant product market ... was the presentation of live professional basketball, reasoning that `the demand function for professional basketball is not effected [sic] in any significant way by the existence of other amateur or professional sports or other forms of entertainment.'"

The majority (Cudahy and Fairchild JJ.) commented: "Such a finding as to the area of effective competition is subject to the `clearly erroneous' standard of review."  It follows that the decision was not concerned with the establishment of the true market definition, but simply with whether the definition adopted by the District Court could be rejected as "clearly erroneous".  Even so, Easterbrook J., a leading authority on antitrust law, dissented, making it clear (at 569) that he considered regard should be paid to "a market in sports franchises", in which the defendants would have lacked market power.  He referred to North American Soccer League v National Football League (supra). 

     Then I was referred to Volvo North America Corporation v Men's International Professional Tennis Council (1988) 857 F 2d 55.  But this decision was concerned with a motion to dismiss.  The appellate court held that the allegations pleaded should go to trial.  The case is not of assistance on the questions of principle with which I am concerned.  Similarly, in Piazza v Major League Baseball (supra), where the plaintiffs were contending for a relevant product market being "the market for ownership of existing major league professional baseball teams", the Court made no decision about that except that the pleading was adequate.

     Counsel placed reliance on Sullivan v National Football League (1994) 34 F 3d 1,091.  This was an appeal from a jury's verdict, in which a new trial was ordered.  The jury (as appears at 1,097) had found the relevant market to be the "nation-wide market for the sale and purchase of ownership interests in the National Football League member clubs, in general, and in the New England Patriots, in particular".  That a jury found a market in these particular interests, in the course of making a decision which, in any case, was set aside, seems to me of little assistance.  However, the judgment of the appellate court stated (at 1,112):

    "Arguably, the market put forward by the NFL - that is the market for NFL football in competition with other forms of entertainment - is closely related to the relevant market found by the jury such that the procompetitive benefits in one can be compared to the anticompetitive harms in the other.  Clearly this question can only be answered upon a much more in-depth inquiry that we need not, nor find it appropriate to, embark upon at this time."

For the purposes of the particular provisions of the Australian Trade Practices Act with which I am concerned, the broader market may well be the one to consider.  In the American context, the United States Court of Appeals for the First Circuit held (at 1,112-1,113) that the jury, having found the narrower market, was bound to go on and consider also the broader market in which the National Football League's ability to compete effectively was, it claimed, involved. 

     After this brief survey of the United States decisions dealing with antitrust suits to which sporting bodies were parties, some further general comments may be appropriate.  The markets propounded in these cases were quite various - including markets, or submarkets in the American sense, in championship boxing; in college football broadcasts; in general entertainment embracing both the National Football League and the North American Soccer League; in sports capital and skill; in major league professional hockey; in major league professional football; in the sale of broadcast rights for sports programming and general entertainment programming; in the sale of network television broadcasting rights for major league professional football games in the fall; in the presentation of live professional basketball; in sports franchises; in the sale and purchase of ownership interests in National Football League member clubs, in general, and in the New England Patriots, in particular; and in National Football League football in competition with other forms of entertainment.  It cannot be said that any one market analysis in relation to a professional sport or sports has established an unquestioned place in United States antitrust law.  The decisions often turned on jury questions, or on whether a ruling below was "clearly erroneous".  Generally, the judgments are much concerned with the Rule of Reason, under which it may have been appropriate to start with a narrowly defined market, and then to consider a wider market in the context of the pro-competitive colour it might give a practice that appeared anti-competitive in the narrower setting.

     The approach to market delineation adopted in the Australian cases discussed earlier in these reasons would suggest that if a practice appears anti-competitive when scrutinized within confined market limits, but pro-competitive once the boundaries of the market are enlarged, the market may have been too narrowly delineated in the first place.  I am not asserting that a particular case might not be better explained otherwise.  But the paradox of a practice or arrangement being both anti-competitive and pro-competitive at the same time may fairly lead to a reconsideration of the market within which the practice or arrangement ought properly to be seen as operating.  The Australian cases emphasize that the market is an instrumental concept (see, for example, Eastern Express Pty Limited (supra) at 59), the application of which involves a value judgment, as Deane J. put it in Queensland Wire Industries Pty Limited (supra) at 195-196, a passage adopted by the Full Court in Arnotts Ltd (supra) at 331-332.  It would be perverse not to remember, when selecting the market boundaries appropriate to a particular case, that the purpose of the Act is the preservation and promotion of competition.  That is the purpose in the implementation of which the choice of a market is to be instrumental.  Therefore, situations where an American court would apply the Rule of Reason because a restriction would actually strengthen a sports league in its endless competition with other sports are cases where an Australian court should consider whether both realism (see Arnotts Ltd at 328) and policy require the selection of a wider sports market.  I think there is great force in Dr McEwin's view that the effect of the challenged commitment and loyalty agreements is to "increase the level of economic competition in an entertainment market or a sporting entertainment market".  On that basis, as he says: "If the relevant entertainment or sporting market is defined too narrowly this will give the false appearance that competition is being restricted when in fact it is being enhanced."

     Overseas authorities, whether European or American, provide valuable assistance in the interpretation of the Act.  But they are not a substitute for the application of the law as it is stated in the Act itself and in decisions of high authority in this country.  A leading role should not be given to decisions, particularly jury decisions, based upon organisational structures in the United States differing in significant respects from those to be found here.  It cannot be taken for granted that the structure of professional sports or of television (whether free to air or pay television) is the same in Australia as it is in the United States.  Even if the American decisions to which I have been referred had spoken with one voice, it would not have followed that the application of the same principles would have led to the same results in the circumstances actually existing in Australia.  The immense size of the economy of the United States must be remembered, and the almost infinite diversity of its composition.  Assuming a game such as American football gives rise to a separate market there, it does not follow that each of the several codes of football played in Australia gives rise to a separate market here.  If games differing from each other by as little as rugby league differs from rugby union are to be treated in that way, the question might be asked whether a reduction in the number of players by one, together with two or three changes in the rules, would suffice to produce a new market.  But that is not how market definition should be decided.  The answer is not to be found in a mechanical application of authorities, and certainly not of authorities decided under different legislation and in different circumstances, but by the application of the principles laid down in the Act and by the Australian courts.

     It follows, from the principles I have discussed, that if the applicant succeeded, as it has sought to do, in confining any relevant market to rugby league, it would encounter less difficulty in demonstrating the League's market power than it would if the boundaries of the market were more widely set.  In fact, no attempt was made to show the requisite market power for the purposes of s. 46, or the purpose or effect of substantially lessening competition within the meaning of s. 45, in relation to a market that included other sports or entertainments.  The case was fought on the markets propounded by the applicant, and a major issue was whether those markets existed.  However, when debating the matter, the applicant complained that the respondents had not put forward any firm counter-contention to show what they said would be a correct delineation of any relevant market.  In the circumstances of the case, I think this complaint is unreasonable.  The applicant bears the onus of establishing the breaches of the Act alleged by it.  Conduct that would be a breach if pursued in a narrowly defined market might not be a breach in a different, and particularly in a more broadly defined, market.  There may, doubtless, be some cases such as Queensland Wire Industries - where the market power of Broken Hill Proprietary was obviously immense, no matter how the market might be defined - where this would not be so.  But generally market power can only be assessed in the context of competition within a market, and the delineation of the market is an essential part of a claim brought under the provisions I have mentioned.  A breach being alleged only on the basis that a narrow market is established, it is a complete answer if the respondents can show that the market is in fact broader, and it would be excessive for them to engage in the academic exercise of exploring the questions whether the line should be drawn around particular sports, or all sports, or so as to include other forms of entertainment as well.

     The applicant's basic contention was, as counsel put it in the written submission,

    "that a major professional sport is, at the least, a market in itself in the sense that it is a market for the product of that professional sport, namely, the games played, the participants in which (on the supply side) include the teams which play and the organiser of any competition in which they play and (on the demand side) fans (whether at the ground or through the media), the media and sponsors".

Counsel further submitted that

    "there are a large number of rugby league fans throughout Australia, but particularly in New South Wales and Queensland, for whom no other sport provides an acceptable substitute.  They may have an interest in other sports to a greater or lesser extent, but their sport is rugby league."

Reliance was placed on the big attendances achieved at matches, the high television ratings, the dominance of the game in New South Wales and Queensland in winter, the large amounts paid for rights to televise or broadcast rugby league and for sponsorship rights, the substantial merchandising figures, and on various other matters, including the opinions of persons associated with rugby league, for whom the game, in the words of its slogan, is "simply the best". 

     There was in these opinions, of course, an element of hyperbole.  One is reminded of that other football game, played in New Zealand, which is claimed to be "the game they play in heaven", an encomium having the merit of being unverifiable!  However, there is no doubt that since about 1988 rugby league has gained in popularity as a spectator sport, and has acquired a leading position in that respect in New South Wales and Queensland.  At the same time, to keep matters in perspective it is necessary to remember that soccer has a far greater appeal to young people as a participatory sport, while rugby union and basketball have both recently made strides towards improving their positions as spectator sports.  The evidence did not examine in any detail the extent of participation in rugby union and basketball by the young, but it did reveal that those controlling the League and its clubs have exhibited concern about the extent of youth participation in rugby league.  Plainly, the future of the game requires the maintenance of a minimum pool from which to draw players, and it would be unrealistic to look at rugby league's position vis-a-vis other sports only in the short term.

     It is accepted that an industry's own perception of the breadth of the market in which a product is involved, as evidenced by the conduct of those engaged in the industry, may be persuasive to show the true extent of the market: Arnott's Limited (supra, at 334); Mark Lyons Pty Ltd v Bursill Sportsgear Pty Ltd (1987) 75 ALR 581 at 591.  In the latter case, Wilcox J. (ubi supra) accepted the suggestion in Donald & Heydon on Trade Practices Law that "the best evidence of the dimensions of the relevant market may be the behaviour of people in the particular trade", reference being made to records of examinations of competitors, customers and products, and activities related to buying and selling, etc.  Evidence was accordingly called on both sides concerning the perceptions of those involved in rugby league and in other spectator sports.  It seemed to me the more telling evidence was evidence of attitudes taken up in various connections before the legal dispute about markets had crystallized.

     For instance, Mr Orlay, a management consultant engaged by News Limited during the planning in relation to the then still somewhat nebulous concept of Superleague, formulated certain revenue assumptions for a rugby league undertaking of the kind proposed.  He tested those revenue assumptions against the gate prices for attendances at games of Australian rules football, rugby union and basketball.  Similarly, "as some sort of a check of the revenue projections [he was] making for Superleague" (he said), he looked at sponsorship of "other forms of sporting entertainment".  This was "with a view to determining whether or not the prices per head or the sponsorships were within some kind of a range that [he] regarded as reasonable".  Mr Orlay described what he did as "gross comparisons", a phrase that later in his evidence grew to "gross or crude comparisons".  However, a letter written by him on 25 November 1994 made it quite clear that the purpose was the serious one of the verification of revenue assumptions.  Mr Orlay was a witness who demonstrated in cross-examination a propensity to attempt to mould his evidence to suit the case he was presenting, and I conclude that the truth is he did see the entry prices and sponsorship payments, involving the sports mentioned, as establishing rates which he was required to take into account in relation to Superleague.

     Equally revealing of the perceptions of another participant in the staging of spectator sport is the 1994 Marketing Strategy drawn up for the Queensland Rugby Union.  The document was intended as a draft for discussion in November 1993 of the future of rugby union in Queensland.  Like similar documents emanating from the League, it reveals a sporting body in a growth phase.  Corporate sponsorship of both the Queensland Rugby Union and the Australian Rugby Union is said to have "continued to increase", and a complete restructure of rugby union in Queensland is revealed as being undertaken.  The document includes the statement:

    "The quality of the product and value for money is everything.  The public, in particular the young, now has a greater range of options available to it.  Rugby competes in the larger relaxation market against all sorts of recreational alternatives, including social events, outdoor concerts, fun parks and of course other sporting attractions.  If Ballymore is to attract more than the traditional rugby supporter we must be able to compete on both an economic and an entertainment basis."  (Emphasis added.)

There follows a comparison, in tabular form, of general admission charges for Queensland rugby union matches, the Broncos rugby league matches, the Brisbane Bears Australian rules football matches, the Brisbane Bullets basketball matches and the Queensland Bulls cricket matches, followed by a statement of charges for cinemas, concerts, theatres and miscellaneous places of entertainment. 

     Having regard to the claim, repeatedly made in general terms on behalf of News Limited, that the League and the clubs could increase admission charges without being concerned about the prices of admission to other sports, it is interesting to note that the prices relating to the three codes of football gathered for comparison by the Queensland Rugby Union, presumably relating to the 1993 season, are all well below the price of admission to a cricket match involving the Queensland Bulls, and are somewhat below the prices charged by the Brisbane Bullets basketball team.  (Similarly, in Perth, it was conceded the Western Reds rugby league team felt a need to keep prices low, below those of Australian rules football and basketball games.)  Two obvious comments on these figures are: first, that the prices for the three codes of football and basketball are all roughly in the same range; and secondly, that actually the Broncos rugby league team charged the lowest prices of all.  It is difficult not to believe that a deliberate policy was involved.  Account must be taken, too, of the fact that there is evidence of the pursuit by the Broncos of a policy of very large scale issues of complimentary tickets.  The actions of the Broncos speak loudly of vigorous competition with the other sporting attractions in Brisbane on ticket prices, and by special promotions such as the giving away of tickets.  It is reasonable to think that this policy is partly responsible for the Broncos' success in building up attendances.  Of course, the quality of the football provided by them, and by their opponents, in rugby league matches, and the quality of the additional entertainment provided before and during the games, are also factors.  So far as the League is responsible for the level of admission prices, it is not behaving in the manner of a monopolist in a League Market, which would charge more.  But the real significance of the table of admission charges lies in the fact that it was compiled in the first place.  It plainly shows that the Queensland Rugby Union saw itself as in competition, as the provider of a spectator sport, with Rugby League and with the other sports listed. 

     The Marketing Strategy document continues with a similar table showing the sponsors of the same teams.  This table shows that a wide range of businesses sponsor sports and, interestingly, that Coca-Cola sponsors all of the sports mentioned.  Industries other than the soft drinks industry also sponsor widely, but through different enterprises.  Again, the real point of the table is in its revelation of Queensland Rugby Union's perception that it competes for sponsorship with the other sports.  Indeed, the comment is made:

    "Despite its relative size and population, sport in Brisbane is a serious and increasingly professional industry.  During our season, Queensland rugby competes with the Broncos, the Bullets and the Bears.  Queensland cricket, has itself just undergone a complete revamp and the `Queensland Bulls' have recently been launched onto the market.  (Although cricket is a summer sport it's [sic] penetration into corporate and public pockets can not be overlooked.)

     Attached is a brief summary of the Brisbane Sports Market.  Naturally, each team has its core supporters, but we are all competing for

     (i)       Corporate Sponsorship

     (ii)      Media & Publicity

     (iii)     Spectators

     (iv)      Television audiences

     (v)       Merchandise."

Under the heading "Spectators", the document refers to "four major winter sport options" as giving the spectator an extensive choice; to the competition for spectators; and to aggressive marketing of season tickets.  It goes on to analyse attendances achieved by the Broncos and the Bears, television audiences for each of the sports mentioned, merchandising by each of the sports, and press, radio and television coverage, in relation to which also rugby union in Queensland is compared with the Broncos.

     Documents produced under subpoena by other sporting bodies, such as the Australian Football League, reveal a similar perception of a competitive market involving a number of different sports.

     A document produced on subpoena by Coca-Cola Amatil Limited analyses that company's approach to sports sponsorships.  Under the heading "Which types of sports do we choose", it lists what it describes as the "Big Four Australian Mega Sports", being Australian Rules Football, Olympics, [Rugby] League and Cricket.  The same document refers to other sports having what it describes as "Broad National Appeal", listing under this rubric Motor Racing, Tennis, Soccer, Rugby Union, Sailing and Cycling.  Basketball, baseball and surfing are nominated as having "National Youth Appeal".  It contains "Guidelines for Identifying National Sports Sponsorships".  This document, as appears on its face, comes from a Sports Sponsorship Manual, and it evidences an attitude that treats the sports mentioned as part of the one sponsorship market, in which each plays a part.  There is no
suggestion in it that rugby league should be singled out as different.

     Evidence was given by a Mr Neate, the general manager of the Sydney Cricket and Sports Ground Trust, whose duties include the scheduling of sporting events at the Sydney Cricket Ground and the Sydney Football Stadium.  His evidence shows that the Trust has marketed memberships, and scheduled events, on the footing that rugby league, rugby union, soccer and Australian rules football are in competition for spectators.  Between 1994 and 1995, the crowds watching the Sydney Swans Australian rules football matches doubled, while the attendances for the Easts and Souths rugby league matches went down.  It seems clear the most likely explanation, having regard to the evidence of Mr Neate, is that these variations in attendances reflected the perceptions of spectators as to the quality of the games in a situation where rugby league and Australian rules football were in direct competition for crowds.

     Counsel for the respondents pointed out that the presentation made to the League by Mr David Smith on 6 February 1995 revealed that News Limited, having by then done a great deal of work and planning in connection with rugby league, itself had a perception of the League as operating in a market that included other professional sports.  Mr Smith's presentation states:

    "We recognise the difficulties John Quayle has been having replacing Winfield ... .  And don't forget they [i.e. he and Mr Arthurson] are out there competing in the same marketplace with an increasingly nervous Australian Cricket Board who are chasing the same dwindling pool of sponsors."

He also said:

    "Add to that the unavoidable fact that despite good news with growing attendances, the Games' [sic] real share of the available winter sporting audience is shrinking, and it's even worse if you take the Broncos crowds out of the equation.  This chart shows you that other sports are taking your audience share and growing faster than you.  [The charts referred to what he called a "BASKETBALL THREAT".]

                            . . .

     Lets [sic] look to the future: Kids now have many options in sport and basketball is gaining more `street cred'.  There are twice as many kids playing basketball than Rugby League in Australia today.

                            . . .

     The money spent on local and international basketball merchandise in total in Australia overshadows that spent on rugby league.  ...

     And let's not forget the inroads that Rugby Union is making, where it's now played in 107 countries, and T.V. coverage is bought by 127 different nations.  ...  [T]hey are moving inextricably [sic] towards professionalism."

He went on to refer to the fact that rugby league was subjected to "heavy competition for winter attendances". 

     The report prepared for News Limited by its consultants, Australian Consulting Partners, on 13 December 1994 saw both rugby union and basketball as competing with rugby league for
attendances, referring to "emerging threats from other sports, becoming more entertaining and more professional".

     In 1992, the New South Wales Rugby League had sent out to clubs a questionnaire under the heading "NSWRL MARKETING OVERVIEW".  There was included in it the question "Who do you see as your competition in your market area?"  The form sought answers under the sub-headings "Other Sports", "Other Entertainments" and "Leisure Activities".  The drafting of the form in this manner is itself significant as indicating the League's then perception of the wide market in which rugby league competed.  The answers of clubs, such as Canterbury and Canberra, are equally so.  Canterbury, under cover of a letter from Mr Moore, referred to soccer, horse racing, trotting, cricket and other sports and activities, while Canberra included in its answers rugby union, Australian rules football, basketball, hockey, soccer, horse racing and snow sports.

     There was a great deal of evidence of competition between sports, for spectators at games, given by witnesses associated with the clubs.  Mr Neil of Canberra, who gave evidence that attendances at rugby league games drop when the quality of the games drop, acknowledged that other sports were included in alternative attractions.  Mr Edwards of Brisbane accepted that attendances on Saturday afternoons are affected by other sports and by horse racing.  Rugby union tests and Australian rules football home games have some effect, while the quality of a game has considerable effect, on the number of spectators.  Mr Ribot saw "the Rugby Union, obviously the Basketball ... soccer and other forms of entertainment" as the Broncos' competition.  In Newcastle, the evidence shows that the numbers of persons attending other sports on a Saturday are sufficient to make it an unsuitable day to stage a rugby league match.  In the Sutherland Shire, where Cronulla is situated, Mr Gow acknowledged that there are about 750 soccer teams compared with 202 rugby league teams in the under 19 age group.  Rugby league is played in the evening to avoid a clash with attendances at soccer, Australian rules football and junior league games in which young people are participating.  Similarly, Mr McLean said "most definitely" he would prefer the Cowboys' games not to clash with the local basketball games, as some people - and that could be twenty per cent of the Townsville rugby league crowd - "would like to go to both".  On the Gold Coast, the local rugby league team requested that its home games be re-scheduled to avoid clashes with the Gold Coast Rollers basketball team.  This is clear evidence that those administering rugby league in that area saw it as being in direct competition with basketball for crowds.  Counsel for the applicant attempted to overcome the problem inevitably raised for their case by arguing that "the Gold Coast's consistent lack of success in the competition would make it very difficult for any meaningful conclusions to be drawn", success on the field being a factor in attendances at games.  But this argument is actually a confession that substitution is likely to occur when a team, such as Gold Coast, provides poor entertainment to a crowd that is looking for good games played by a successful team.  Substitution is not concerned only with price, but also with the quality of what is provided for the price.  It is concerned with the effect of a monopolist charging more and/or giving less. 

     Evidence of rugby league's competition with other sports also came from Newcastle and Illawarra.  Mr Lawler, a most impressive witness with an obvious breadth of knowledge of the sporting scene in the Newcastle area, expressed the view that his club found itself in competition with other sports and entertainments.  There was some criticism of some details of his evidence, but I do not think the criticism affects the substance of his views, and I accept him as a perceptive man, and a witness of integrity.  As is true of Sutherland Shire, the districts about Newcastle, he pointed out, are much stronger areas for soccer among the young than they are for rugby league.  It is obvious that soccer is a threat for the future.  In the case of Illawarra, there is evidence that it sought entry to the New South Wales rugby league competition, in 1982, partly for the reason that it perceived a threat of increasing competition by virtue of the entry of the local soccer club into the national soccer competition, and also by virtue of the entry of the local basketball club into the national basketball competition.  It felt a need to compete more effectively, for its part, by entering into the senior rugby league competition.  This is clear evidence that all three sports were in the same market, and the success of rugby league in Wollongong, since then, is no refutation of that point; it only shows that at the present time rugby league is doing well in the competitive struggle.  Likewise, the overtures of Canterbury-Bankstown to the "new Australians" in its district are clear evidence of competition with soccer.  Mr Moore denied this, but he was a particularly unimpressive witness whose evidence I would not accept on any contested issue unless it happened to accord with my own view of the probabilities.  He was forced to acknowledge in cross-examination that he was trying to get "a dual allegiance" of soccer fans, and indeed that horse racing at Canterbury racecourse also "would have an effect" on a Saturday rugby league game.  Similarly, Penrith, it was conceded, tried to avoid staging a match to coincide with a big event at Eastern Creek Raceway.  Soccer was also accepted as a competitor by Mr Stanton of Manly, who referred to Manly's first division soccer club, as well as to other sports.  He claimed that his "core supporters" were safe, but he added "particularly those who buy the season tickets", a comment suggesting that short term safety was what he had in mind.  If Manly were to perform badly, it is clear on all the evidence it would lose a substantial part of its crowd - and where would they go?  From this point of view, there is substance in the comment of Mr Barnes of Balmain that "there would be a lot of people" - he was referring to persons "interested in sport and interested in other things" - "that would just go to a particular game if it appears attractive to them".  So, too, in the North Sydney area, there is clear evidence of people going both to rugby union and to rugby league games.  Mr Saunders "would prefer to play on a day [Gordon] weren't playing [rugby union]".  Of course, avoiding a direct clash between games does not mean avoiding any wind of competition - people may not want to go to two football games in the one week.

     I did not regard Mr Parker of Souths as always objective in his evidence, but I do accept his evidence indicating that there is perceptible competition from Randwick Racecourse.  Mr Fitzgerald of Parramatta gave similar evidence regarding Rosehill Races.  The fact that there had not been a direct clash in recent years between a Parramatta game and the Rosehill races is no rebuttal, and I found Mr Fitzgerald to be both very knowledgeable about rugby league and a witness whose honesty was transparent.  From the other side, Mr Edwards of the Broncos made the following interesting concession in cross-examination:

    "Question:What you are trying to do is attract people from other sports activities and other entertainments, isn't it, by issuing complimentary tickets? [He had said that in 1993 an average of 20,000 complimentary tickets were issued per game, though, of course, many were not taken advantage of.]

     Answer:   That's correct, to increase our core audience."

Having regard to arguments about the significance of a club's "core crowd", to which I shall come, the way Mr Edwards appears to use the expression "core audience" should be observed.  In attempting to improve their fortunes, it was accepted by this witness, "the Broncos have never relied just on the game itself to attract supporters and sponsors".  They have provided other entertainment, good seating, and liquor, and have greatly raised the attendance of women at games.  That also suggests active competition in a market not limited to the game of rugby league.

     Some emphasis was placed by counsel for the applicant on the proposition that a small increase in the price of admission to rugby league games would not affect attendances.  This proposition was supported by a number of witnesses from various clubs, but was contrary to other evidence including that of Mr Quayle, who thought that an increase of $2 in the price of a ticket would have an adverse effect.  I have already stated my acceptance of Mr Quayle's credit as an honest and extremely capable man.  He also obviously has vast experience of rugby league.  I think his opinion is likely to accord with the fact.  But it is a question of degree.  Obviously, some people would not be deterred by a quite significant increase in the price of a ticket.  However, I return to a point made by Prof. Kolsen, to which I have already referred.  The non-profit objectives of rugby league must not be left out of account.  Prof. Kolsen says: "It is not valid to apply standard microeconomic theory to non-profit organisations without considerable modification."  To take an example he uses, but apply it more directly to the point now under discussion, it would be a perversion of the principles of the Trade Practices Act to argue that a school tuck-shop is a monopolist in a narrow market, confined to the tuck-shop at a particular high school, because a 10% rise in its prices would not lead to the substitution of lunches from  much more highly priced commercial enterprises in the area (or, of course, from geographically distant tuck-shops).  The fact is that the tuck-shop prices are subject to two constraints, not only one.  The one constraint is the general level of commercial prices, but the other is a moral constraint imposed by the attitude of those responsible for the tuck-shop, who wish it to provide good and affordable nourishment available to the poorest child in the school.  Consequently, its prices are well below commercial prices, and a 10% rise would undoubtedly have little effect, except perhaps on an economically insignificant proportion of really poor children.  This conclusion has nothing at all to do with substitutability, as that concept is normally employed in market definition for the purposes of the Trade Practices Act.  It would certainly not demonstrate the possession of market power to extract monopoly rents by the imposition of excessive prices.  If the Parents' Association, or whoever was running the tuck-shop, went out of existence, and a commercial franchise issued for the tuck-shop in the particular school, it would soon become apparent that the real market in which it operated included nearby sandwich shops charging prices that would undoubtedly exert an economic constraint upon the tuck-shop franchisee.  In the same way, if the Broncos raised their prices to the levels charged by cricket in Brisbane, or even to the levels charged by basketball, rugby union, and Australian rules football in Brisbane, there is no reason to doubt that any significant increase beyond that level would provoke the operation of the principle of substitutability.  That has not been tested yet because rugby league has been conscious of its so-called "working class" origins, and has tried to keep its prices affordable to all for reasons more moral than commercial - that is, of essentially the same kind as those which affect the conduct of a school tuck-shop.  (In addition, I think, there has been a desire to promote the game by keeping prices significantly below the prices charged by competing sports.  This also is not the behaviour of a monopolist, and does not suggest the existence of a narrow market confined to rugby league.)

     Before leaving the topic of admission prices, I should refer specifically to the evidence of Mr Cowan of the Penrith Club, who said: "I don't think we really take that into consideration at all [i.e. cost of other activities].  Our pricing is what we believe we can charge, which would be fair in the rugby league market."  Asked when he first heard a reference to "the rugby league market", he said: "I think I have been using it for years."  I do not believe this evidence.  There is also evidence, particularly from Mr Millward of Illawarra, that price rises do provoke comment (he actually said "numerous complaints"), and in my view it is very unlikely that there would be no comparison with the prices of other sporting and entertainment activities.  The game has been promoted for people on less than a high income, and for families.  The small increase, in relative terms, of $2 per ticket from $18 to $20, proposed by the Broncos for the 1996 season, is not consistent with the view that there is a lack of price sensitivity.  It is, of course, consistent with the view of Mr Gurr of Easts (which coincided with that of Miss Dawson of Auckland) that rugby league clubs are competing in "a very broad entertainment market".  (Cf. the statement of Wilcox J. in Adamson v New South Wales Rugby League Limited (supra, at 259) that "[t]he League and its participating clubs are engaged in the business of providing public entertainment".)  It is also consistent with the evidence of Mr Neil of Canberra that some people choose to buy a $10 ticket, giving access to a less desirable seat, rather than a $13 ticket, a fact which demonstrates, despite his endeavour to resile from the admission, that price does matter, and that a quite small variation matters. 

     Much was made by the applicant of the concept of a "core crowd".  Evidence was given by a number of witnesses that the spectators at a rugby league game would include a core crowd of dedicated supporters of a particular club.  It was accepted, of course, that there would also be persons who might attend only a few games in a season, games which aroused their interest, but who on other occasions might watch another sport or go to the beach or on a picnic.  There were many attempts to define, in general terms, segments of a typical crowd.  One thing widely agreed was that crowds following a particular club may vary greatly, according to the quality of its games and its position in the competition table.  People like to see good games played by winners.  Taking all this into consideration, the applicant's argument was that, for the core crowd, no other sport or entertainment substitutes for rugby league.  It is their sport.  This was said to demonstrate the existence of a narrow market for spectators, confined to rugby league.

     In my opinion, the argument completely misconceives the principle of substitutability.  The principle is concerned with whether a monopolist or combine, selling a particular product, would be constrained from charging more and giving less by competition, in the long run, from substitute products.  Granted that a core crowd might be hard to discourage, nevertheless, if a significant body of spectators attracted by an enjoyable game at an appropriate price were at risk of being lost to rugby league, that would be a real constraint on any attempt to lower standards or raise prices, irrespective of how firm the loyalty of the core crowd might remain.  No doubt, there is a core group of persons for whom the taste of coca-cola is supreme, and for whom pepsi-cola is a poor alternative.  They would not easily be lost to their favourite taste.  Yet if the significant body of customers who buy what appears the best value at the time would be lost by a marketing decision, that would be a real constraint on the commercial behaviour of Coca-Cola, no matter how confident the company might be about its core customers.  In the appropriate economic sense, pepsi-cola is plainly substitutable for coca-cola.  Even if that were not so as a matter of the meaning of the word "substitutable", the further expression, in s. 4E of the Trade Practices Act, "or otherwise competitive with" would ensure that the relevant concept, for the purposes of the Act, would extend that far.

     So, here, I conclude that at least the rugby union, soccer, Australian rules football and basketball against which, the evidence shows, rugby league sees itself as competing for spectators, would attract a significant proportion of rugby league's crowds if the League chose to attempt to assert market power by significantly raising prices or giving less; and the sports which would attract persons away from rugby league in those circumstances belong in the same market with it.  Both because those other sports would, as competitors, be able to take advantage if the League did act in that way, and also because the League, as I have said, does see itself as in competition with those other sports, it is as a matter of fact constrained in its commercial conduct from acting in the manner of a monopolist.

     So far as soccer is concerned, the applicant discounted this game as a spectator sport on the basis that the national competition has moved to the summer.  Rather than showing that soccer does not belong in the same market as rugby league, this seems to me to show that it does, and that the administrators of soccer recognize the fact.  They are attempting to reduce the impact of direct competition from rugby league and Australian rules football by avoiding a head on clash for attendances, at premier games at the national level, at a time when rugby league has established itself as the most popular winter spectator sport in New South Wales and Queensland, and Australian rules football has done the same in the southern States.  But, as the High Court made clear in Queensland Wire Industries (supra), the market should not be delineated in a way which ignores potential participants.  Especially must this be true of the consideration of substitutability, which is concerned with the hypothetical reaction of the market to the hypothetical attempt of a monopolist or combine to exercise market power.  Soccer continues to be played in winter, apart from the national competition, and that could readily return in the relevant hypothetical event.  One thing which is clear, on the evidence, is the sensitivity of rugby league followers to any reduction in the quality of games, so that an attempt to give less might well lead to a substantial melting away of crowds.  In the long run, there is no reason to think that even the core crowds would not be eroded.  The idea that rugby league is irreplaceable, for many people, is in conflict with the facts that, in the southern States, Australian rules football plainly replaces it; that in other places other codes of football plainly replace it; and that a considerable slice of the popularity of rugby league in New South Wales and Queensland is of quite recent origin.  There is evidence of a resurgence of rugby union in these two States, and if rugby league attempted to exercise monopoly power, it seems to me there would, to adapt the words used in the Queensland Milling case, be very much of a reaction.  Rugby union could grow as a winter spectator sport, and soccer could return, quite apart from the threat of further growth of Australian rules football and basketball.  It must, for instance, be wrong to suggest that the core crowd of the Queensland Crushers could not go elsewhere; they certainly did not go to the Queensland Crushers the year before last, because the Crushers were not playing.

     The market in which rugby league competes cannot be identified only by short term considerations.  In recent years, the League has expanded to Perth, Auckland and Canberra, as well as in Queensland.  These moves involve competition with Australian rules football and rugby union.  The League's recent growth has been rapid, but there is evidence that rugby union and basketball have also, though even more recently, made some strides, and that soccer has a strong hold on the young.  A snap-shot picture of the competitive forces involving these sports in the short term might be very misleading.  Long term prospects that can be more or less clearly foreseen are, to that extent, a present reality, from the point of view of identifying the constraints upon commercial action.  This fact emphasizes the importance of the principle stated in Tooth; Tooheys (supra), and in other cases cited earlier in these reasons, that substitution possibilities in the longer run may be very significant for market delineation.  They are, as Prof. Brunt has emphasized, important if the Act is to be applied in a way that is consistent with its economic objectives.

     Separate arguments were advanced in respect of sponsors.  The applicant contended that I should find a uniqueness in rugby league, from the point of view of sponsors, which denied the substitutability of sponsorship agreements in relation to other sports.  Again, the argument related to New South Wales and Queensland.  It was also concerned with a popularity much of which is quite recent.  It tended to ignore the fact that other sports, such as rugby union and basketball, seem to be following suit, at least to some extent, in the seeking of sponsorships, and the emphasizing of the entertainment values of their sports.  I accept that rugby league is the most popular winter sport in New South Wales and Queensland in a number of respects, although not in all respects.  It is a spectator sport, rather than a sport for a wide range of participants.  As I have already pointed out, there is evidence that Coca-Cola, a very large sponsor, does not see rugby league as unique.  Nor did the cigarette companies treat the Winfield Cup as a unique opportunity - there was no jostling to put in a rival bid in order to wrest it away from Rothmans.  Rothmans, for its part, was involved in numerous other sporting sponsorships.

     But the applicant's written submissions placed reliance on a document prepared by the League, in October 1994, for presentation to potential sponsors.  This was claimed to be "of very great significance".  In my opinion the brochure, for that is what it is, employs the language of hyperbole often found in advertising documents.  It does use the word "unique" in relation to rugby league, but without asserting any fact involving true uniqueness.  Rather, it associates rugby league with other popular entertainments.  For instance, it states that "[t]he sport is now a viable alternative to traditional, and heavily hyped, favourites like music, movies and videos".  In a summary section, it states:

    "There are very few commercial opportunities like the ownership of Rugby League.

     Sponsorship of the Australian Rugby League will make your organisation part of Australia's sporting, entertainment and cultural life."

It will be noted that, so far, the suggestion is that there are few, not that there are no, commercial opportunities similar to rugby league, and that sponsorship of rugby league is associated with the general notion of Australia's sporting, entertainment and cultural life.  Then the document goes on to assert:

    "It also represents a unique weapon in [an] increasingly competitive marketing environment.  A weapon which transcends traditional marketing opportunities, simply because Rugby League is so close to the hearts of so many millions of Australians."

In that context, the word "unique" is plainly not used in any measured way. 

     No doubt a rugby league sponsorship may have special advantages for particular corporations, just as, from the whole gamut of advertising techniques and opportunities, some may be more suitable than others in a particular situation.  But experts in promotion and advertising do have a wide range of methods available to them from which to choose alternatives.  After all, the sponsorships of some sponsors are exclusive, and their business rivals undoubtedly find alternatives.  I accept the evidence of Mr Gurr that

    "in a sense all sports, including the impending Sydney 2000 Olympics, are in competition for the sponsorship dollar.  That is because there is a limited pool of major corporations with sufficient funds to become the major sponsor of any sporting club in Australia."

He made it clear that the competition of other sports was meaningful, so far as Eastern Suburbs Rugby League Club was concerned.  Similarly, Mr Quayle saw the League as competing for sponsorship with other major sporting bodies.  He instanced the making of representations to Coca Cola with a view to its replacing Winfield, representations which failed, Coca Cola becoming the major sponsor, not of the League, but of the Australian rules body, the Australian Football League.

     Again, in relation to free to air television, and also in relation to pay television, the applicant contended that rugby league has a uniqueness which frees it of the competitive restraints of programmes sourced in any other sport or entertainment.  Reliance is placed, in support of these contentions, on the very great expenditure by media interests on the support of the protagonists in this very case.  But monopolies are not the only commercial interests commanding high expenditure, and moderation often suffers in the heat of contest.  Auctions prove that.  The key to decision on this aspect of the case seems to me to be the fact that the Nine Network has been able to maintain continuously the highest television ratings in Sydney, Melbourne and Adelaide (as well as elsewhere), notwithstanding that it has not always held the rights to rugby league in Sydney, and it does not hold the rights to the Victorian and South Australian equivalent, Australian rules football, in Melbourne and Adelaide.  There can be no argument that the Nine stations have been able to substitute for rugby league during the period when Channel 10 held the rights in Sydney, and are able to substitute for Australian rules football in Melbourne and Adelaide, where Channel 7 holds the rights.  Indeed, when Channel 9 secured once more the rights to rugby league football, far from acting as if it had regained an irreplaceable prize to be kept jealously to itself and to be milked of every advantage, it arranged to sub-license some of the rights for considerable periods, and it has never displaced with rugby league a full hour of the substitute programming it had been utilizing on Sundays.  I found the evidence of the respondents on this issue persuasive, but even if it had been less so, I would have seen great difficulty in rejecting the implications of the achievements of the Nine Network. 

     The applicant urged that particular advertisers want to reach the very demographic attracted by the televising of rugby league matches.  Evidence was presented suggesting some variations in the composition of the groups of people who watch individual sports.  Of course, there is a sense in which every product is unique.  The greaseproof paper which the Supreme Court of the United States found to be substitutable for cellophane was not identical with it.  That is not the test.  In the case of the televising of rugby league, it is important to remember that the relevant market is one in which television networks or stations, not individual advertisers, are buyers.  If the networks can substitute, as the Nine Network plainly can, the substitutable products they buy should not be assigned to different markets simply because they are not identical with rugby league.  To the extent, furthermore, that rugby league has special advantages, they apply only in two States, while the purchasing of television rights is done nationally.  Australian rules football is in very much the same position as rugby league, except that its advantages are in the three southern States and Western Australia.  Cricket, on the other hand, is popular throughout the whole national region.  I accept the evidence of Mr Quayle that rugby league, Australian rules football, rugby union and basketball all compete for the best and most lucrative nation- wide television exposure, and that the television companies compete with each other to obtain rights in relation to those same sports.

     The applicant relies on the evidence of Mr Chisholm, a man of great experience in the television industry, who said:

    "If I were responsible for sports rights acquisitions for a network with key stations in New South Wales and Queensland ... I would certainly pay a substantial premium to get the League rights.  By this I mean the price I would pay would not necessarily be related to the price of any other programming genre.

     In my view, the rights to Rugby League are of such value that even substantial changes in price would not trouble me greatly."

Mr Gyngell, perhaps an even more experienced witness, who gave evidence to a different effect, discounted the last sentence of this passage on the ground that "price has never troubled Mr Chisholm".  His own view was that there was "in general ... a direct relationship between the revenue that will be generated from advertising on a particular program and the cost of acquiring and broadcasting that program".  He said: "[R]ugby League football, as a sport, is a desirable, but not an essential input [in]to the programming `mix' of national network programming covering the whole of Australia."  I accept Mr Gyngell's view of this matter.  Variety is essential to television, and particularly in the case of pay television, a variety of sports is required.

     The evidence and arguments presented pay television as raising some special issues.  It differs from free to air television in a number of respects.  A fundamental difference is that the operator is seeking to generate subscriptions, in the case of pay television, whereas, in the case of free to air television, the object is to achieve viewer ratings.  The evidence indicates that exclusivity is a matter of great importance for pay television.  However, that is just what the restrictions known as the anti-syphoning regulations prevent a pay television operator from having, in Australia, with respect to major sporting events including rugby league.  The restrictions are imposed as licence conditions - see Commonwealth of Australia Gazette of 6 July 1994.  It was suggested by counsel for the applicant that these conditions do not apply to Superleague, but of course no Superleague was contemplated at the date of publication of the Gazette.  If a significant new competition became a reality, the logic of the imposition of the conditions would suggest the likelihood that they would be extended to Superleague also. 

     The anti-syphoning restrictions distinguish the position in Australia from that in England and elsewhere.  However, the evidence indicates that pay television will thrive on an appropriate range of programmes, including both movies and sport, together with music and family programming.  Rugby league is important, but so are other major sports including Australian rules football and cricket.  A significant aspect of pay television is that the decision to subscribe will, in very many cases, be a family decision, a factor which I think is likely to boost the importance of movies, and of a cover of a variety of sports, rather than any one sport.  It is interesting to note that, in England, despite the virtual exclusivity of relevant telecasts there, no premium over the payment in respect of movies is imposed for a subscription in respect of sport, and sport and movies appear to have similar marketing priorities.  Diversity is accepted as essential.

     The issues bearing on the delineation of the appropriate market for the purposes of the allegation of the possession of "a substantial degree of power in a market", within the meaning of s. 46, and the delineation of the market relevant in this case for the purposes of s. 45, were the subject of detailed and voluminous evidence.  I have discussed those aspects of the evidence which seemed appropriate in the light of the arguments presented by counsel.  It would be wearisome to prolong further the recitation of particulars.  Applying the principles expounded in the cases to the circumstances in evidence, and upon the conclusions of fact which I have set out, I find that the applicant has failed to establish any of the markets alleged by it.  It follows that the claims based on s. 46 and s. 45(2) (apart from the claims relating to an alleged exclusionary provision) cannot be sustained, whether or not there are other answers to them.  I think it is therefore convenient to turn at once to the remaining group of claims under the Trade Practices Act, that is to say, to the question whether certain provisions of the Commitment Agreements and the Loyalty Agreements were also provisions of a contract, arrangement or understanding within s. 4D of the Act and were exclusionary provisions. 

  DID THE PARTIES TO THE COMMITMENT AND LOYALTY AGREEMENTS

                MAKE EXCLUSIONARY PROVISIONS?

     It is convenient to begin a consideration of this part of the case by setting out some of the relevant statutory provisions.  Subsections (2), (3) and (4) of s. 45 provide as follows:

    "(2)  A corporation 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 45A, `competition', 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 related to such a corporation, supplies or acquires, or is likely to supply or acquire, goods or services or would, but for the provisions, supply or acquire, or be likely to supply or acquire, goods or services.

     (4)  For the purposes of the application of this section in relation to a particular corporation, a provision of a contract, arrangement or understanding or of a proposed contract, arrangement or understanding shall be deemed to have or to be likely to have the effect of substantially lessening competition if that provision and any one or more of the following provisions, namely:

     (a)  the other provisions of that contract, arrangement or understanding or proposed contract, arrangement or understanding; and

     (b)  the provisions of any other contract, arrangement or understanding or proposed contract, arrangement or understanding to which the corporation or a body corporate related to the corporation is or would be a party,

     together have or are likely to have that effect."

To understand what is meant by the references in s. 45 to "an exclusionary provision", it is necessary to go to s. 4D, which itself requires reference to be made to s. 4F.  So I set these sections out also:

    "4D.(1)   A provision of a contract, arrangement or understanding, or of a proposed contract, arrangement or understanding, shall be taken to be an exclusionary provision for the purposes of this Act if:

     (a)  the contract or arrangement was made, or the understanding was arrived at, or the proposed contract or arrangement is to be made, or the proposed understanding is to be arrived at, between persons any 2 or more of whom are competitive with each other; and

     (b)  the provision has the purpose of preventing, restricting or limiting:

          (i)  the supply of goods or services to, or the acquisition of goods or services from, particular persons or classes of persons; or

          (ii)the supply of goods or services to, or the acquisition of goods or services from,
particular persons or classes of persons in particular circumstances or on particular conditions;

          by all or any of the parties to the contract, arrangement or understanding or of the proposed parties to the proposed contract, arrangement or understanding or, if a party or proposed party is a body corporate, by a body corporate that is related to the body corporate.

     (2)  A person shall be deemed to be competitive with another person for the purposes of subsection (1) if, and only if, the first-mentioned person or a body corporate that is related to that person is, or is likely to be, or, but for the provision of any contract, arrangement or understanding or of any proposed contract, arrangement or understanding, would be, or would be likely to be, in competition with the other person, or with a body corporate that is related to the other person, in relation to the supply or acquisition of all or any of the goods or services to which the relevant provision of the contract, arrangement or understanding or of the proposed contract, arrangement or understanding relates.

     4F.  For the purposes of this Act:

     (a)  a provision of a contract, arrangement or understanding or of a proposed contract, arrangement or understanding, or a covenant or a proposed covenant, shall be deemed to have had, or to have, a particular purpose if:

          (i)  the provision was included in the contract, arrangement or understanding or is to be included in the proposed contract, arrangement or understanding, or the covenant was required to be given or the proposed covenant is to be required to be given, as the case may be, for that purpose or for purposes that included or include that purpose; and

          (ii)that purpose was or is a substantial purpose; and

     (b)  a person shall be deemed to have engaged or to engage in conduct for a particular purpose or a particular reason if:

          (i)  the person engaged or engages in the conduct for purposes that included or include that purpose or for reasons that
included or include that reason, as the case may be; and

          (ii)that purpose or reason was or is a substantial purpose or reason."

     The applicant alleges that Australian Rugby Football League Limited and New South Wales Rugby League Limited (for present purposes, I shall refer to them to them together as "the League", as I have sometimes done earlier in these reasons) -

    "entered into written Commitment Agreements in identical terms with each of [the clubs], each of them doing so in the knowledge and with the expectation that each other Corporate Club having a 1995 Team would sign and return the Commitment Agreement."

The Further Amended Statement of Claim then sets out the terms of the Commitment Agreement relating to the admission of each particular club for the five years referred to in the agreement, the club's agreement to participate in the competition in each of the playing seasons of those years, the club's agreement "not to participate in any other rugby league competition not conducted or approved by [the league]", and the club's undertaking -

    "to perform all obligations expressed in the Articles of Association and Rules and Regulations for the time being of the Second Respondent, for so long as the Second Respondent was responsible for the conduct and administration of the National Competition ... ".

The pleading then alleges (by para. 28): "Each of the 1995 Teams participates in the National Competition by reason, inter alia, of the submission of its Corporate Club to the Memorandum and Articles of Association, the Rules and Regulations of the [League] and upon the terms of its Commitment and Loyalty Agreement." 

     The pleading alleges (by para. 31) the sending to each of the clubs of a Loyalty Agreement "in identical terms, except for the identification of the Corporate Club to each particular Loyalty Agreement".  It refers (by para. 32) to the obligations imposed by the Loyalty Agreements.  It is then pleaded (by para. 33) that "the First Respondent delivered a copy of the Loyalty Agreement and directed each Corporate Club to sign the Loyalty Agreement and return it to the First Respondent", and it is alleged that an extremely short time was allowed for this purpose.  Then, it is alleged (by para. 34):

    "Each of the [clubs] signed and at or about the time directed returned the Loyalty Agreement to the First Respondent in the knowledge and with the expectation that each other Corporate Club having a 1995 Team would sign and return the Loyalty Agreement."

     Having made these allegations in respect of the Commitment and Loyalty Agreements, the pleading proceeds (in para. 35) to allege that, by reason of certain matters, each of the clubs "is competitive with each other".  The matters relied on are set out in para. 13(b) and (c), as follows:

    "13   In relation to the Teams Market

                            . . .

     (b)  each Corporate Club having a team seeks, to the extent available, to obtain and maximise revenue, in respect of that team, by:

          (i)      competing for money and other prizes offered accordingly to the rules of the particular competition

          (ii)     gate receipts (and other merchandising revenues) from the attraction of spectators to home games

          (iii)    selling sponsorship rights (including naming and advertising rights) in respect of the team and the clothing and equipment of the team and the playing grounds of that Corporate Club

          (iv)     selling corporate boxes at the ground of that Corporate Club

          (v)      selling merchandising rights in respect of the sale of goods identified with the team (including the team name)

     (c)  each Corporate Club having a team competes with each other Corporate Club having a team or other person wishing to enter a team to participate in a Competition in any or all of the following ways:

          (i)      entering a team to participate in a Competition and to win money and seeking other prizes offered therein

          (ii)     seeking to establish its team as the best team, or alternatively one of the best teams, in a Competition

          (iii)    seeking thereby to obtain maximum television broadcasting of matches played by its team in a Competition

          (iv)     seeking to engage Premier Players to play for its team

          (v)      seeking to obtain revenue from entering into sponsorship
arrangements for and in respect of its team

          (vi)     seeking to obtain supporters for its team throughout Australia

          (vii)    seeking to attract spectators to attend matches and, in particular home matches in which its team participates

          (viii)   seeking to obtain revenue, to the extent permitted by the competition organiser, from merchandising of clothing and other goods bearing the team's identifying name, logo and or get-up".

     In addition, or alternatively, it is alleged that each of the clubs -

    "but for the provisions of the Commitment Agreement and the Loyalty Agreement and the Articles of Association and Rules and Regulations of the First and/or Second Respondent, would be or would be likely to be in competition with each other in the supply of teams to other competition organisers."  (Paragraph 36).

     It is then alleged (by para. 37) that -

    "The Commitment and Loyalty Agreements entered into by each of the [clubs] having a 1995 Team collectively constitute an arrangement or understanding between each of those companies and the First and Second Respondents."

It is alleged (by para. 38): "The terms of each of the Commitment and Loyalty Agreements are the provisions of the said arrangement or understanding between the [clubs] and the
First and Second Respondents."  It is alleged (by para. 39) that each of the provisions relied on -

    "has the purpose of preventing, restricting or limiting the [clubs] from the supply of the service of participation by it or its team in a Competition conducted or to be conducted by the Applicant or, alternatively, by any other person than the First and/or Second Respondents in the years 1995 to 1999."

It is further alleged (by para. 40) that each of the provisions -

    "has the purpose of preventing restricting or limiting the [clubs] from the acquisition of services from particular persons, namely any Premier Player, whether now engaged under a Player Contract or otherwise, in the course of the Corporate Club supplying the service of participation by it or its team in a Competition conducted by any other person than particular persons, namely the First and Second Respondents in the years 1995 to 1999."

It is further alleged (by para. 41) that each of the provisions -

    "has the purpose of preventing, restricting or limiting the [clubs] from the acquisition of services provided, or which could be provided, to teams by a competition organiser (including organising, promoting, administering and conducting competitions in which teams may compete and identifying and arranging other commercial opportunities to the benefit of the competition organiser and the teams) from the Applicant, or in the alternative from persons other than the First and Second Respondents."

     It is on the basis of these allegations that each of the provisions is alleged to be an exclusionary provision, and it is alleged that each of the respondents has contravened s. 45(2)(a)(i) of the Act; and by giving effect to any of the provisions, would contravene s. 45(2)(b)(i) of the Act.

     In the applicant's written submissions, the exclusionary provisions alleged were compressed as follows:

    "Three exclusionary provisions are alleged.  The first relates to the clubs competing to supply their services to competition organisers; the third relates to the clubs competing to acquire the services of competition organisers; the second relates to the clubs competing to supply the services of premium players."

     It was not alleged that there is any competition between the League and any of the clubs.  This is hardly surprising, but it is important to bear it in mind because s. 4D is concerned with a provision of a contract, arrangement or understanding "between persons any 2 or more of whom are competitive with each other".  In the present case, the competition must be found, if at all, between the clubs.

     A preliminary submission about s. 4D, that was put by counsel for the respondents, was that an exclusionary provision must have that character at the time it was made, and having regard to all the requirements of s. 4D.  If at the time it was made, the provision was not of the proscribed character, changes in circumstances later cannot make it so.  A dictum of Lockhart J. in Dowling v Dalgety Australia Limited (supra, at 134) was cited in support of this proposition.  There, Lockhart J. held that the inquiry as to purpose under s. 45(1) and (2)(b)(ii) "must relate to the purpose of the parties to the ... agreement when it was made".  I think the submission is correct that, equally, the ingredients of s. 4D must be present at the date a contract or arrangement was made, or an understanding was arrived at, if a provision of the contract, arrangement or understanding is to constitute an exclusionary provision within s. 4D. 

     A salient aspect of an exclusionary provision, as I have indicated, is that the contract, arrangement or understanding of which it is part must be "between persons any 2 or more of whom are competitive with each other".  What "competitive" means in this context is explained by subs. (2), which, in one respect, extends the meaning of the adjective, and in another respect restricts it.  Both these effects of subs. (2) are important.  The extension may be said, at the risk of some over-simplification, to embrace a situation of likely competition, as well as actual competition, and in addition a case where only the provision of some (possibly not the immediately relevant) contract, arrangement or understanding stands in the way of competition.  There is also a reference to a related body corporate which is not relevant for present purposes.  The restriction is that the competition which exists or is likely must be "in relation to the supply or acquisition of all or any of the goods or services [in the present cases services] to which the relevant provision of the contract, arrangement or understanding ... relates".  So s. 4D is not satisfied by a case where no more is proved than that two or more of the relevant parties are in competition; they must be in competition in relation to some of the very goods or services the subject of the allegedly exclusionary provision - for that must be "the relevant provision", as s. 2 operates only "for the purposes of subsection. (1)". 

     The matter is important in the present case, since the clubs are alleged to be competitive with each other in a number of different senses.  But competition which has nothing to do with the relevant supply or acquisition of services cannot be taken into account.  Wilcox J. expressed this point in Eastern Express Pty Limited v. General Newspapers Pty Limited (1991) 30 FCR 385 at 420 when he referred to the "area of competition" in respect of services not "coincid[ing] with the area of contractual regulation".  This is why, despite the range of matters referred to in para. 13(b) and (c) of the Further Amended Statement of Claim, the applicant's submissions were confined to the three areas of alleged competition that I have mentioned.  It was not in dispute that the other alleged areas could not even arguably be said to involve services to which the impugned provisions of the Commitment and Loyalty Agreements relate.

     It needs also to be borne in mind that if a particular provision of the Commitment Agreements, or a particular provision of the Loyalty Agreements, is vulnerable to s. 4D, that does not necessarily bring down the balance of the agreement in question.  Section 4L of the Act expressly preserves the validity of a contract a severable provision of which contravenes the Act, and in any case s. 4D is expressed in language which singles out a particular provision, and it is only that provision to which a corporation may not give effect without infringing s. 45(2)(b) of the Act.  A corporation is, however, forbidden by s. 45(2)(a) to make a contract or arrangement or arrive at an understanding containing such a provision; although the contrast I have pointed out with para. (b), and the absence of any express invalidation of the contract, arrangement or understanding, suggest that, if it has in fact done so, the corporation is perfectly entitled to give effect to those terms of the contract, arrangement or understanding which do not involve exclusionary provisions.

     Since the relevant competition, for the purposes of s. 4D, is confined to the services (in the present case) to which the impugned provisions of the Commitment and Loyalty Agreements relate, and those services are quite limited, the question whether the clubs are relevantly competitive is somewhat simplified.  There are really two questions, though each must be answered at the two different times when the Commitment Agreements and the Loyalty Agreements were concluded.  The questions are:

1.   Whether at those dates the clubs were or were likely to be in competition in relation to the supply of the service of a team or in relation to the acquisition of the services of a competition organizer;

2.   Whether the clubs were or were likely to be in competition in relation to the acquisition of the services of "premier players" for the purpose of supplying such a team as is referred to in 1.

     Competition within the meaning of s. 4D in the first respect would be contrary to the history of rugby league, the constituent documents of the League and the clubs, and the terms on which the clubs were admitted to the competition.  From the beginning, the rugby league football competition (a competition in a different sense) was a joint activity of the predecessor of the League, or of the League, and the clubs which had been admitted to the competition at any particular time.  The joint nature of the activities of the clubs in a sporting association has been repeatedly affirmed in the various United States authorities, to which counsel for the applicant referred me in the argument about the delineation of the relevant market.

     In  National Collegiate Athletic Association v Board of Regents of the University of Oklahoma (supra, at 101) the majority judgment of the Supreme Court of the United States asserts:

    "As Judge Bork has noted: `[S]ome activities can only be carried out jointly.  Perhaps the leading example is league sports.'"

And at 117, the judgment continues:

    "Our decision not to apply a per se rule to this case rests in large part on our recognition that a certain degree of co-operation is necessary if the type of competition that petitioner and its member institutions seek to market is to be preserved.  It is reasonable to assume that most of the regulatory controls of the NCAA are justifiable means of fostering competition among amateur athletic teams and therefore procompetitive because they enhance public interest in intercollegiate athletics.  The specific restraints on football telecasts that are challenged in this case do not, however, fit into the same mold as do rules defining the conditions of the contest, the eligibility of participants, or the manner in which members of a joint enterprise shall share the responsibilities and the benefits of the total venture."

     In his dissenting judgment in National Football League v North American Soccer League (supra, at 1,077) Rehnquist J. (as he then was) said:

    "The NFL owners are joint venturers who produce a product, professional football, which competes with other sports and other forms of entertainment in the entertainment market.  Although individual NFL teams compete with one another on the playing field, they rarely compete in the market-place.  The NFL negotiates its television contracts, for example, in a single block.  The revenues from broadcast rights are pooled.  Indeed, the only interteam competition occurs when two teams are located in one major city, such as New York or Los Angeles.  These teams compete with one another for home game attendance and local broadcast revenues.  In all other respects, the league competes as a unit against other forms of entertainment."

He went on to point out that "NFL football is a different product from what the NFL teams could offer independently".  Referring to the cross-ownership rule in question in that case, he said (at 1,078):

    "Its purposes are to minimize disputes among the owners and to prevent some owners from using the benefits of their association with the joint venture to compete against it.  Participation in the league gives the owner the benefit of detailed knowledge about market conditions for professional sports, the strength and weaknesses of the other teams in the league, and the methods his co-venturers use to compete in the marketplace.  It is only reasonable that the owners would seek to prevent their fellows from giving these significant assets, which are in some respects analogous to trade secrets, to their competitors."

It will be appreciated that the refusal of certiorari in this case does not imply that the majority of the Supreme Court differed from the views of the present Chief Justice on these particular questions.  Indeed, his approach appears to be generally accepted in the United States.  For instance, in Volvo North America Corporation v Men's International Professional Tennis Council (supra, at 71-72) the United States Court of Appeals, Second Circuit, referred to sports leagues as joint ventures and to the fact that "professional sporting events cannot exist unless the producers of such events agree to cooperate with one another to a certain extent".  In the United States District Court decision in Mid-South Grizzlies v National Football League (supra) at 566, authority was cited for the proposition that:

    "The view that the production of professional sports requires joint decisions of the different teams in order to insure their continued existence has become widely recognized."

Reference was made to earlier authority for the proposition that "the economic success of each franchise is dependent on the quality of sports competition throughout the league and the economic strength and stability of other league members"; and to the "business interdependence [of] team owners".  Authority was also cited (at 567), in which team owners were referred to as "partners in the operation of a sports league".  The court accepted (at 568) that would-be team owners were seeking to obtain the benefit of "jointly earned profits", and that even the money earned by individual promotion had a joint aspect, insofar as "the ability to earn these individual profits is an indirect benefit of being a member of the league."  In a footnote at the same page, the court cited J. Weistart & C. Lowell, The Law of Sports, in which it was stated:

    "An analysis of the relationship between clubs within a league suggests that the various league members do not compete with one another in an economic sense.  Rather, a league is more like a partnership.  While each club initially contributes its own capital, the various participants to a large extent share in the joint profits of the venture.  This participation in profits is achieved through various arrangements, such as the pooling of television receipts and division of gate receipts between home and visiting clubs.  Thus, a decision on access to membership is basically a decision as to whether particular individuals (or their business entities) will be allowed to participate in the partnership venture.  Since the various members pool their efforts and do not engage in economic competition with one another, an adverse decision on membership in the usual case
has no appreciable impact on the level of competition which will take place."

In United States Football League v National Football League, the United States Court of Appeals, Second Circuit, said (supra, at 1,372):

    "The very concept of a league involving separate business entities (teams) requires concerted behavior among them and the exclusion of outsiders.  Even the drawing up of a schedule requires that horizontal competitors (teams) conform to jointly made decisions and necessarily excludes others."

In North American Soccer League v National Football League (supra, at 1,251) the United States Court of Appeals, Second Circuit, stated with respect to the National Football League that, to perform its functions, "some sort of an economic joint venture is essential", and pointed out that playing equality between the teams was also necessary.  The court added (at 1,252):

    "Although NFL members thus participate jointly in many of the operations conducted by it on their behalf, each member is a separately owned, discrete legal entity which does not share its expenses, capital expenditures or profits with other members.  ...  The NFL teams are separate economic entities engaged in a joint venture."

     The control conferred by the clubs on the League in various ways shows that the clubs were not set up to compete, as commercial entities, to supply their teams or to acquire a competition organizer; instead they reposed in the League the power to determine who should supply such teams, and did not have in contemplation at all any thought of competition to acquire the services of some other competition organizer (which in any case did not relevantly exist).  The clubs had, through their representatives, joined in arranging for the incorporation of the League with the express objects conferring powers of control that I have already set out, including the power to "determine which clubs shall be entitled to enter teams in the Rugby League Premiership", and to "grant suspend exclude or forfeit the right of a club ... to membership of or representation on the League".  Articles I have set out gave power to the League over the constitutions of the clubs and their Memoranda and Articles of Association. The Premiership Competition Rules required "[e]ach Club admitted into the Competition [to agree] to abide by the Memorandum and Articles of Association, the Rules and Regulations of the League and decisions of the Board of Directors of the League and any Committee of the League made pursuant thereto and any terms and conditions imposed upon its admission to the Competition."  In every case, and in many cases in the strongest terms, the Memoranda and Articles of Association of the clubs reflected the League's control.  The form of application for admission to the competition included an agreement by each club that, if admitted, it "will abide by the Memorandum and Articles of Association of the League and the Rules and the decisions of the Board of Directors of the League and its Committees made pursuant thereto" and "all conditions attached to its admission to the Competition".

     Each club must be taken to have submitted to the control of the League every time it nominated its two representatives under the constitution of the League, and they, as its representatives, accepted membership subject to the Memorandum and Articles of Association of the League and its Rules and Regulations.  But, for present purposes, what is crucial is not so much whether the clubs were legally bound as whether, while they continued to participate in the activities of the League and in the competition and to retain their representatives as members of the League, there could, as a matter of fact, be any question of their contemplating the supply or acquisition of services in relation to their teams outside the control of the League.  For s. 4D looks to whether, at the relevant date, competition existed or was likely.  Confining attention for the moment to the Commitment Agreements, at the time they were entered into all of the clubs were acting on the basis that the competition was controlled by the League and that there would be no change except as the League decided.  No significant change by the League was likely or expected.  Insofar as individuals had been involved in Superleague proposals, only Mr Ribot had any kind of authority from his club, and both he and his directors insisted that they contemplated only a Superleague competition controlled by the League, and not any breakaway competition.  Whether or not they were in truth acting outside the scope of the Memorandum and Articles of their club and their fiduciary duties as officers of it in what they did do, there can be no doubt that they would have been acting contrary to their own and their club's obligations had they been promoting, contrary to their evidence, a rival competition.

     The applicant argued that nevertheless there was evidence of competition between the clubs to provide teams in the League's competition.  Reliance was placed on the "exclusion" of Newtown.  But I am satisfied that Newtown was not excluded.  It excluded itself by getting into a financial situation in which it was simply incapable of maintaining any longer a team in the competition.  Then it was said that Western Suburbs was excluded in 1984, and that this indicated competition between the clubs to remain participants.  But although the decision to exclude Western Suburbs was put on the basis that it was necessary to reduce the number of teams participating, and that this necessitated the exclusion of one, Wests being chosen, I am satisfied on the evidence which I accept that this decision would never have been taken but for the fact that the Western Suburbs club had ceased to be viable.  It is not unprecedented for an unpalatable decision to be put on a basis that never would have been adopted but for the perception of an underlying need for the decision.  There is a kind of politics in organisations such as the League.  At all events, I am satisfied that those who made the decision acted with the intention of exercising the League's power of control in the interests of rugby league, and on the basis that Western Suburbs would not be able to continue to maintain an appropriate team, not on the basis of accepting one competitor for a place over another, notwithstanding the terms in which the decision was expressed.  Their true attitude is clearly revealed in the decision to readmit Western Suburbs upon its change of location to Campbelltown, which restored its viability.

     The applicant suggested that a dispute between the North Sydney club and the League, in which the club was reminded "that participation in the Winfield Cup Premiership Competition is dependent on approval by the Board of any application for such participation", supported the view that there was competition for such approval.  But this was simply a comparatively mild affirmation of the League's control in  circumstances of some provocation, the Chairman of the North Sydney Club having acted in a manner inimical to the League's principal sponsorship. 

     Certainly, the League asserted over a substantial period, in express terms, its power to reconsider a club's position every year.  That power was enshrined in the rules.  But I have already said that I accept the evidence of Mr Arthurson.  One of the matters on which he insisted, with some fervour, was the view that no club which maintained its ability to comply with the general requirements would be forced out of the competition.  I accept that the fact was, and was known to be, that clubs had no need to compete with each other to remain in the competition.  They had but to comply, for themselves, with the requirements.  The fact is that the competition has been expanding steadily over a number of years; no club has been asked to leave since the special case of Western Suburbs.

     Reliance was also placed by the applicant on the proposition that there was competition between would-be entrants for admission to the League.  This seems to me to be irrelevant.  The question is whether the existing clubs, which were parties to the Commitment and Loyalty Agreements, were in competition, not whether any of them had in the past been in competition, as a would-be entrant, with some other would-be entrant. 

     I accept that, as was submitted for the applicant, the clubs perceived that the League did not regard the system of annual application as a mere formality.  At the same time, it is equally clear that the guidelines laid down by the League were not interpreted in any technical spirit, and clubs were repeatedly treated as if they had complied, where there appeared to be substantial reason for their non-compliance and their capacity to fulfil their part was not threatened by it.  The intention was always to allow clubs that were viable to continue, while laying down guidelines the object of which was to ensure that these clubs did remain viable.  It was not to set up a competitive process between the existing clubs, in which there would be winners and losers, with the losers being excluded. 

     There was an ongoing debate in the League about the desirability of having a smaller competition, which might be achieved by the amalgamation of clubs.  But it was part of the evidence of Mr Arthurson, which I have believed, that he had set his face against any such amalgamation taking place, except by decision of the amalgamating clubs themselves.  Other witnesses took the same view, and I am satisfied that it was, and was known to be, the strongly prevailing view.  There was no realistic prospect, at the time of the Commitment Agreements, or at the time of the Loyalty Agreements, that any other view would be taken, either then or for the indefinite future.  Indeed, I infer that the strength of this feeling in the League, and among the clubs, was a major reason why the Superleague presentation by Mr Smith struck no responsive chord, or almost none, except with individuals who had been offered extraordinarily large sums of money for themselves. 

     I accept the submission of the respondents that the annual applications simply involved the achievement of requirements according to a unilateral test, applied to each club individually, and involving no element of commercial rivalry between the respective applicants.  There was no process of competition between the clubs when these annual applications were submitted to the League.  Not only was the procedure of its nature non-competitive; there is no acceptable evidence to suggest competitive behaviour was in fact engaged in by the clubs.

     It is one of the ironies of this case that the legal argument for the applicant asserted the existence of competition between the clubs to remain in the League's competition, while at the same time the chief proponent of Superleague, Mr Ribot, was asserting, as he had always asserted, the opposite.  Supported by Mr Moore, he complained because, he said, the League was not exercising its power of control to ensure that there was real competition in relation to the right to field a team.  Indeed, this conflict in the applicant's case was not confined to the evidence.  In supporting the s. 46 case, counsel relied on Mr Ribot's view to suggest that the League was behaving as a monopolist, unconcerned about the quality of what the competition was providing to spectators, sponsors and television.

     There was, of course, never any suggestion at the hearing that any other competition organizer, apart from the League itself, was ever on the horizon, unless it was News Limited.  But News Limited had, as at November 1994, clearly stated through its Chief Executive: "If there is to be a Superleague it has to be under the control of the ARL."  Neither side suggested that this statement was insincere at the time it was made.  What is more, as counsel for the respondents pointed out, News Limited had never contemplated the possibility of organizing a competition between the clubs, nor did it ever do so later.  From the beginning, the possibility that News Limited investigated, as was made clear by the feasibility document of 12 August 1994, did not relate to a Superleague competition between the existing clubs, but a Superleague competition between teams of a new breed, the Superleague licensees.  Later, these were identified as the AH companies, but it was never proposed that they would be the clubs.  So it is simply wrong to talk of competition between the clubs for the supply of the services of News Limited, either in respect of an existing competition, or in respect of a likely competition.  Those services were not available to the clubs, nor were they likely to become available to them.

     Furthermore, the clubs had not been set up to engage in such a competition, but to accept the control of the League, and to compete in its competition.  Indeed, it follows inexorably from the impossibility of a club fielding two teams each being its best team (that would involve what Thomas Aquinas called a contradiction not even God could achieve) that if a club were to involve itself in the only alternative competition ever contemplated, it would immediately cease to be a competitor (if at any time it had been) for a place in any competition.  The competitor would be the licensee, which would field the team, and in that competitor the club would just own some greater or lesser parcel of shares.  Not only would retention of an appropriate premiership team by the club be impossible according to the concept as proposed, but in fact the arrangements for the Superleague competition, when formalised and put into execution, involved the Superleague clubs agreeing to give up their teams completely.

     When attention is directed to the Loyalty Agreements of February 1995, the position is even stronger for the League.  The clubs had been admitted to the competition for the next five years, and so could not be regarded as competing, or likely to compete, in relation to the acquisition or supply of services relating to admission to a competition.  That would be true of the position as it was in February 1995, even if there was later revealed to be a defect in the previous agreement, subject to one qualification I shall mention.  For the question is simply whether, in February 1995, the clubs were in fact in competition with each other in relation to the relevant matters, or were then likely to be in such competition.  Since the November agreements had been accepted as valid, and News Limited, for its part, had unequivocally stated that there would not be a rebel competition, and that any further proposals would be made "through the front door of the League", there was simply no competition between the clubs of the kind suggested, nor was any likely.  The position, as it stood at that time, was graphically described by one of the chief persons among those later involved in the "blitzkrieg" by which Superleague was established, Mr Neil of Canberra, as being that Superleague was then "dead in the water". 

     The qualification I said I would return to is that s. 4D(2) includes, in its explication of the circumstances in which persons are competitive, the case where "but for the provision of any contract, arrangement or understanding ... [one of them] would be, or would be likely to be, in competition with the other person" in the relevant respect.  This part of the subsection seems to be designed to cover a case where a prior exclusionary provision is all that stands in the way of parties to a later contract, arrangement or understanding being competitive within the definition.  I think the words "the provision of any contract, arrangement or understanding" refer to such a prior exclusionary provision, although the drafting cannot be said to be entirely precise.  It makes sense that the legislature should have set out to prevent evasion of the section by virtue of a prior exclusionary provision.  But I do not consider this part of the section affects the present case.  For it is not any exclusionary provision (if there was one) of November 1994 by virtue of which the clubs were assured of admission to the competition for five years as at February 1995.  What gave them that assurance was that each had been promised admission by a written agreement individually made with it by the League, and had in return promised to participate in the national competition for the agreed playing seasons, observing and performing all obligations expressed in the Articles of Association and Rules and Regulations for the time being of the League.  None of this constituted an exclusionary provision, on any reasonable view.  Whether or not it was accompanied by a contract, arrangement or understanding containing an exclusionary provision, each agreement made directly between a club and the League, by which the club was admitted and agreed to play, could not be described as an exclusionary provision. 

     The structure of the League was such, and had been for almost a century, that no contract, agreement or arrangement between the clubs was necessary or contemplated when a club, which was already a member of the League in the accepted sense, arranged for its continued admission following the close of a football season.  The structure had always been that this was a matter to be settled between the individual club and the League, and one in respect of which all that was required was an exercise of what McLelland J. in Hawick (supra), and the High Court in Buckley v Tutty (supra), call the League's function of "control".  Not only was this so in terms of the constituent documents and legal nature of the League and the clubs; it was so too in the most basic practical terms, since all that the League required, to assure the stability of the structure of the competition it was administering and controlling, was a sufficient number of individual agreements with clubs wishing to continue in the rugby league competition.  When the representatives of the clubs agreed to the incorporation of the League with its constituent documents, the evidence shows clearly that they intended to entrust this matter to the League, and to empower it to deal with each of them individually in the interests of the game.

     The aspects of the situation which I have been discussing do more than merely to show that, whether or not an exclusionary provision formed part of an agreement, arrangement or understanding made or arrived at at the time of the Commitment Agreements, clubs were not competitive "within the meaning of section 4D", in the respects under discussion, at the time the Loyalty Agreements were made in February 1995.  They also illuminate the fundamental difficulty of applying s. 4D to the circumstances with which I am concerned.  As I stated earlier, s. 4D deals with an agreement, arrangement or understanding involving persons who are competitive with each other.  It was never intended to deal with "vertical" arrangements, to use the jargon of this area of law and economics.  The terms on which the League deals with the clubs are quite outside its purview.  They are "vertical" arrangements, and they do not contemplate or require "horizontal" arrangements between the clubs.  If they involve conduct at which the Trade Practices Act was intended to strike, the relevant provisions are provisions such as s. 46, turning upon quite different considerations. 

     In this case, it seems to me, the applicant, being aware of the difficulty of establishing that the circumstances involved a breach of s. 46, has attempted to wrest the provisions of s. 4D to serve purposes for which they were never designed.  In order to propound an exclusionary provision, it has been necessary to propound an arrangement or understanding to be inferred from the making of the individual Commitment and Loyalty Agreements.  I shall turn later to the question whether any such arrangement or understanding can be inferred.  For the present, the point is that the arrangement or understanding had to be outside of the individual Commitment Agreements and Loyalty Agreements, which were not made between competitive parties.  But the applicant did not face up to the implication that the inferral of an arrangement or understanding containing an exclusionary provision would not necessarily destroy the separate, and perfectly valid, commitment agreement or loyalty agreement with each club.  Only if the Commitment and Loyalty Agreements were entered into pursuant to exclusionary provisions would this follow.  To infer a collateral, accompanying or consequential (whichever expression one might use) arrangement or understanding containing an exclusionary provision would be to infer something totally irrelevant to the validity and operation of the Commitment and Loyalty Agreements.  Although a number of the clubs had joined Superleague, and their officers were available to the applicant as witnesses, no evidence at all was called to suggest that the clubs had got together and actually expressed any arrangement or understanding before entering into the Commitment Agreements.  It was not suggested that club chairmen or chief executives had telephoned each other.  What was suggested was that the officers of the clubs wished and expected that other clubs would also execute and abide by the agreements.  If, in the circumstances, there was an arrangement or understanding, it seems to me that it would have arisen out of the Commitment Agreements, not that the Commitment Agreements would have arisen out of it.  What each Commitment Agreement itself arose out of was the pre-existing structure committing admission to the competition to an interaction between an individual club and the League, and the invitation made by Mr Arthurson or Mr Quayle to each individual club.

     There remains one further area of alleged competition between the clubs, to which the alleged exclusionary provisions are claimed to relate.  That is the acquisition by the clubs of the services of premier players, or of premier players to participate in a competition conducted by persons other than the League.  This issue raises a quite separate point.  Section 4D is concerned with "the supply of goods or services to, or the acquisition of goods or services from, particular persons or classes of persons".  In the present case, "goods" are not relevant; only "services" are relevant.  By s. 4(1) of the Act, it is provided that, "unless the contrary intention appears" -

    "`services' includes any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce, and without limiting the generality of the foregoing, includes the rights, benefits, privileges or facilities that are, or are to be, provided, granted or conferred under -

     (a)  a contract for or in relation to -

          (i)  the performance of work (including work of a professional nature), whether with or without the supply of goods;

                            . . .

     but does not include rights or benefits being the supply of goods or the performance of work under a contract of service".  (Emphasis added.)

     The problem in the present case is that none of the clubs was, or was likely to be, in competition with any other club in relation to the supply or acquisition of any services of premier players, at the time either of the Commitment Agreements or of the Loyalty Agreements, except upon the terms of the standard player contract of the League.  That form of contract, as I have already noted, was "a contract of service", that is, of employment.  It was not a contract otherwise providing for the supply of services.  It was a form of contract, on the evidence, that had been chosen deliberately just because it took the employment of players outside the Trade Practices Act.  There was no likelihood that the League or the clubs would agree to a change in this respect, and no likelihood that any Superleague competition would involve any such change.  So far as Superleague is concerned, in the first place, both in November 1994 and in February 1995 the position was that the only Superleague concept in any way suggested involved the control of the League, so that player contracts would inevitably continue to take the same form; and secondly, the inherent unlikelihood of Superleague utilizing a different form of contract may now be seen as confirmed by the actual Superleague player contracts, which are in this respect the same as the player contracts of the League.

     Since the clubs were not seeking, and were not likely to seek, in competition with each other, the services of rugby league players, except upon the terms of employment contracts expressly excluded from the services to which the Act relates, they were not relevantly competitive within the meaning of s. 4D.  In Sun Earth Homes Pty Ltd v Australian Broadcasting Commission (1990) 98 ALR 101 at 107, I pointed out that the definition of "services" in the Act is not a true definition.  By contrast with some of the words defined in s. 4(1), the word "services" has been expounded only by the provision of "a list of things that it `includes'".  However, the exclusion at the end of the definition of the performance of work under a contract of service is quite precise.

     Accordingly, the applicant's case based on exclusionary provisions within the meaning of s. 4D must fail, because the clubs are not competitive in a relevant sense.  However, I should go on to consider the position in respect of some other elements of an exclusionary provision which, it is contended for the respondents, are also lacking.

     The proscribed purpose is central to s. 4D.  Because agreements dealing with supply and acquisition of goods and services are at the heart of commerce, s. 45 would be likely to have quite extraordinary results, destroying unexceptionable transactions, if it were not restrained by the necessity to find the proscribed purpose.  A case involving an exclusionary provision is to be contrasted with cases involving contracts, arrangements or understandings that have the effect of substantially lessening competition in any market (to which s. 45(2)(a)(ii) and (b)(ii) and s. 45(3) apply).  In an exclusionary provision case, mere effect will not do; for a quite innocent acquisition of goods on a large scale, for example, may have the effect of preventing, restricting or limiting the acquisition of goods by someone else.  What is requisite is proof that "the provision has the purpose of preventing, restricting or limiting" supply or acquisition in the way set out in s. 4D(1)(b).

     An investigation of the purpose of a provision alleged to be an exclusionary provision may raise a number of issues.  Is the purpose of a provision to be determined in the objective sense explained in the taxation cases dealing with s. 260 of the Income Tax Assessment Act 1936?  Or is it, notwithstanding the formulation adopted in the section, "the provision has the purpose ...", necessary to find the subjective purpose of the parties to the contract, arrangement or understanding?  Fortunately, I do not have to solve this problem of exegesis of the section, because that has already been done by the Full Court in ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460 at 474-477.  It was there demonstrated that, having regard to the provisions of s. 4F, which refers to the purpose for which "the provision was included", it is necessary to

    "look to the purposes of the individuals by whom the provision was included in the contract, arrangement or understanding in question.  It therefore directs attention to the `subjective' purposes of those individuals."

     But to say that the purpose of the provision is to be ascertained subjectively is not to remove all difficulty.  Under consideration is a provision of what is said to be a contract, arrangement or understanding made or arrived at "between persons any two or more of whom are competitive with each other".  Must the purpose be the purpose of all of them? Is it enough that the purpose is the purpose of one or some of them, and if so what about the case where the purpose is that of a party to the contract, arrangement or understanding who is, however, not competitive with any of the other parties?  The respondents here submit that the purpose must be common to all the parties to the agreement, a submission for which they cite the decision of Wilcox J. in Carlton and United Breweries (NSW) Pty Ltd v Bond Brewing New South Wales Ltd (1987) 16 FCR 351 at 356, where his Honour said: "The purpose referred to in par (b) of the definition is a purpose common to the parties."  But this statement was made in a case where an arrangement was alleged between two parties said to be in competition.  I accept that in such a case, it would generally be necessary to find a purpose common to those parties, although ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (at 477) shows that this will not necessarily be so.  In that case, one party insisted upon provisions being included in an agreement, and the Full Court held, the other party having challenged the agreement on the basis the provisions were exclusionary, that it was "therefore appropriate to look to the purposes of the party as a result of whose efforts [exclusionary provisions] were included".  In the same case (at 475), the Full Court referred to the situation where a contract is made between a number of parties, "some of whom may not have the proscribed purpose".  As I understand the judgment, their Honours contemplated that there might be cases where the subjective test could be satisfied by the purposes of some only of the parties to the agreement who were, as a matter of fact, responsible for it having been included in the agreement.

     But that leaves the case where the proscribed purpose is that of a party to the contract, arrangement or understanding who, although a party to it, is not one of the two or more competitive with each other whose presence as parties makes it susceptible of consideration under s. 4D.  It seems to me that, in cases of this kind, the decision must still have regard to the finding that a party to the contract, arrangement or understanding procured the inclusion in it of the provision, and to the ascertainment of that party's purpose in doing so.  But s. 4D is concerned with provisions of contracts or arrangements made, or understandings arrived at, between persons, and the scope for finding that a provision was included only for a purpose of one party must be quite limited.  The decision of the Full Court to which I have referred was an unusual case where one party's peculiar position gave it a special preponderance of power in the negotiation of a contract.  In general, and of their very nature, contracts, arrangements and understandings made or arrived at between parties are characterized by their mutuality.  Most often, it will be very difficult to find that a provision was included in fact for a particular purpose, where that purpose was confined to a single party.  Where there is some kind of consensus, it is to be expected that a provision will have been included in it for purposes mutually agreed or contemplated. 

     Of course, s. 4F envisages cases where the proscribed purpose is but one of several purposes, although it must then be "a substantial purpose".  But it has to be remembered that s. 4D applies to contracts generally, and it would be strange if the legislature intended that a party's contract, entered into for an entirely innocent and appropriate reason, should be vitiated by a purpose confined to the other party to the contract, which, since purpose does not have to be disclosed when contracts are concluded, may quite possibly have remained undisclosed.  Indeed, the fact that s. 4D says nothing about disclosure of purposes tends to confirm that such a situation was not contemplated.  Furthermore, although it is clear that s. 4F applies to the construction of s. 4D, it should not be overlooked that s. 4F is a general provision, applying "[f]or the purposes of this Act", and there is some verbal infelicity in its application to s. 4D.  That is because s. 4F, requiring a subjective interpretation of purpose, has to be applied to s. 4D which is expressed in objective terms - "the provision has the purpose of preventing, restricting or limiting ... ".  I think it is legitimate to take the language of s. 4D into account, and to conclude that the subjective purpose of one party only can hardly be regarded as falling within an intention the legislature has expressed by the words "the provision has the purpose".

     I turn now to examine a little further the extension, in s. 4F, to cover the case where there is more than one purpose, including the proscribed purpose, and that purpose is "a substantial purpose".  In my opinion, the function of the reference to purpose in s. 4D must be kept steadily in mind, even while s. 4F is being applied to interpret it.  The purpose with which we are concerned is essential to the application of s. 4D.  It has a major part in defining the scope of the section.  Without it, the section would embrace, as I have already pointed out, normal commercial transactions that were certainly not intended to be invalidated.  It is in the context of this crucial role played by the relevant purpose that the word "substantial" must be given meaning to cover cases of multiple purposes, only one of which offends.

     The adjective "substantial" will have a different effect according to the noun which it describes.  Often it refers to size, as in the expression "a substantial amount of money", or (to take an example from the Trade Practices Act) in the adverbial use to be found in the expression "substantially lessening competition" repeatedly used in s. 45.  One can measure an amount of money or a degree of lessening of some activity.  But purpose is not measured in any comparable sense.  Applied to purpose, the adjective refers to its quality or significance, and may be regarded as a word of characterization.  Cf. Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273 where, although the phrase "substantial part" might be thought to refer to quantity, Lord Evershed (at 283) thought it referred, in s. 49 of the Copyright Act, 1956 (UK), to "the substantial significance of that which is taken", and Lord Pearce (at 293) said that "[w]hether a part is substantial must be decided by its quality rather than its quantity".  Without the requirement of substantiality, s. 4D could conceivably be given a quite mechanical operation, whenever the proscribed purpose was found.  But the necessity to find a "substantial purpose" ensures that a process of evaluation must be undertaken, which rejects any mechanical application of the section, and looks at the importance of the alleged purpose as a factor that produced the inclusion of the provision.

     The limitation of the meaning of "purpose", so as to confine it to a "substantial purpose" of the inclusion of the provision, profoundly affects the operation of s. 4D.  This is made clear by the reasoning of Mason C.J. and Deane J. in Devenish v Jewel Food Stores Pty. Limited (1991) 172 CLR 32.  That case was concerned with the operation of s. 45D, to which their Honours (in dissent) gave a very wide ambit.  In doing so, Mason C.J. (at 43-44) drew attention to "the fact that, unlike the balance of the Act, s. 4F(b) does not apply to s. 45D(1) so that the purpose for engaging in any impugned conduct under that section need not be a substantial purpose."  Deane J. elaborated the point, when he said (at 51-52):

    "Ultimately, and after some vacillation, I have come to the conclusion that the literal effect of the words of s. 45D should not be confined in a way which would exclude from the scope of the section any conduct which does not satisfy some superimposed requirement ascertained by reference to a perception of the kinds of conduct with which the section is primarily concerned.  I am influenced in reaching that conclusion by a number of considerations.  For one thing, I do not think it is possible to define with any precision the limits of those kinds of conduct.  ...  For another thing, I am not persuaded, on balance, that it is possible to discern in s. 45D, read in its context in the Act, a clear legislative intent that the section should be so confined.  In that regard, I am influenced by the provision of s. 45D(2) which clearly indicates that the reference to `the purpose' in s. 45D(1) should not be construed as referring only to what can be identified as the `real', `dominant' or `ultimate' purpose."

Although the majority reached a different conclusion in the particular case, the remarks (at 47-48) of Brennan J. (with whom Dawson J. agreed) are consistent with this passage from the judgment of Deane J.  When reading what Deane J. wrote, it is necessary to bear in mind that, at the relevant time, the provision of s. 45D(2) to which his Honour referred was in the following terms:

    "Paragraph 4F(b) does not apply in relation to sub-section (1) or (1A) of this section but a person shall be deemed to engage in conduct for a purpose mentioned in that sub-section if he engages in that conduct for purposes that include that purpose."

     The contrast between the form of s. 45D that was under consideration in Devenish and s. 4D is striking.  In the language of Deane J., it suggests that s. 4D should be construed as referring only to what can be identified as the "real", "dominant" or "ultimate" purpose.  At least, it should be understood as referring to a purpose the quality of which characterizes the provision as one that has this purpose.  To place some emphasis on that characterization is only to recognize the extreme importance of the attribution of the purpose, so far as the application of s. 4D is concerned, bearing in mind that the section contains no other ingredient that would of itself call for legislative invalidation of a transaction.  In my opinion, by contrast with the application of s. 45D as it stood at the time of Devenish, the application of s. 4D does require the Court to evaluate the substantiality of a relevant purpose in connection with the transaction to which it is said to relate as a transaction attracting the operation of s. 4D.

     In considering whether the quality of substantiality should be attributed to one of a number of purposes, in a case under s. 4D, the seriousness of the consequences of a contravention should be borne in mind.  It is not to be thought that the legislature intended to visit these consequences upon the basis of a slight connection between the transaction and a purpose falling within the section.  It would not be consistent with general principle to interpret the section so as to widen the area of its interference with general freedom of contract under the law, especially as the consequences would be so serious: see Thompson v Australian Capital Television Pty Limited (1994) 54 FCR 513 at 526, a passage which is cited as representing the law in Pearce and Geddes on Statutory Interpretation in Australia, 4th ed. (1996) at 142.  A similar view was taken by Smithers J. in Dandy Power Equipment Pty Ltd v Mercury Marine Pty Ltd (1982) 44 ALR 173 at 191-192, where his Honour said:

    "`Substantially' is a word the meaning of which in the circumstances in which it is applied must, to some extent, be of uncertain incidence and a matter of judgment.  [Smithers J. was referring to the expression `substantially lessening competition' in s. 47(10).]  There is no precise scale by which to measure what is substantial.  I think in the context, particularly the penalty and other remedies for contraventions of the Act, and the nature of trade which is the subject of the Act, the word is used in a sense importing a greater rather than a less degree of lessening."

Similarly, in Radio 2UE Sydney Pty Ltd v Stereo FM Pty Ltd (1982) 44 ALR 557 at 564, Lockhart J. said, with reference to the same phrase in s. 45(2) of the Act:

    "[T]he lessening of competition must be at least real or of substance.  However, I see considerable force in the view contended for by counsel for 2DAY that, in the context of s 45, the word means substantially in the sense of considerably.  As I have not reached any final view on this question I prefer to leave it open."

Although his Honour thus left the matter open in that case, he returned to the subject in Dowling v Dalgety Australia Limited (supra, at 135), where he held: "In my opinion, the substantial lessening of competition of the kind to which s 45 is directed means substantial in the sense of `considerable'."  As I have said, I do not think the adjective substantial, which gains colour and meaning from the noun to which it is attached, has quite the same significance when it describes purpose as it does in some of these examples.  But, in whatever context it is used, the authorities I have cited suggest it connotes real significance.  In Peter Williamson Pty Ltd v Capitol Motors Ltd (1982) 61 FLR 257 at 264, Franki J. referred to the expression "a substantial reason" in s. 4F(b) in its application to s. 96(3)(d), saying:

    "It is therefore necessary to consider the meaning of the word `substantial' bearing in mind that it is used in connexion with the definition of an essential ingredient in an Act, the contravention of which may be expected to have grave consequences."

He went on to refer (at 265) to some remarks of Barwick C.J. in Mikasa (N.S.W.) Pty. Limited v Festival Stores (1972) 127 CLR 617 at 634-635, and concluded:

    "In my opinion it is not possible to place precise limits on the meaning of the word `substantial' in s. 4F.  I consider that the proscribed reason in s. 96(3)(d) must be one which is of real significance in the decision to withhold supply of goods, or to adopt the words of Barwick C.J., an `operative' reason."

     Returning to the remarks of Mason C.J. and Deane J. in Devenish v Jewel Food Stores Pty Limited, after this brief reference to some of the other authorities, it seems to me that their Honours' reasoning makes it plain that the requirement of substantiality colours the whole of s. 4D.  It is a section aimed at a particular type of provision in a contract, arrangement or understanding ("the transaction") - one included for purposes among which a substantial purpose was preventing, restricting or limiting a supply to or acquisition from particular persons by all or any of the parties to the transaction.  A consequence, even an inevitable consequence, need not be a substantial purpose.  Other provisions forming part of the context of s. 4D (cf. s. 45(1)(b)) refer to the "effect" of a provision, but s. 4D does not.  That was obviously deliberate.  The reason for eschewing reliance on effect in the drafting of s. 4D seems plainly to be that otherwise the net would be too wide.  Any successful joint tender, submitted by parties otherwise in competition, must have the effect of restricting or limiting supply or acquisition of the goods or services the subject of the tender, insofar as that supply or acquisition, had the tender not been successfully made, might have involved third parties.  But that kind of limitation is what competition is about, and s. 4D was not enacted to stifle competition.  Only if a substantial purpose of a joint tender were to impose such a restriction or limitation would s. 4D bite.  In the case of an ordinary commercial dealing, the purpose would simply be the pursuit by the tenderers of their own businesses.  In other words, s. 4D would strike at perfectly proper transactions if the legislature's careful insistence on an improper purpose were not sufficiently heeded.  In the case of this particular section, it is the illicit purpose which is essential to an allegation of breach.

     Of course, purpose can be inferred from effect: Dowling v Dalgety Australia Limited (supra, at 134); General Newspapers Pty Limited v Telstra Corporation (supra, at 198); Eastern Express Pty Limited v General Newspapers Pty Limited (supra, at 72); Vallance v The Queen (1961) 108 CLR 56 at 82, per Windeyer J., who said: "What a man does is often the best evidence of the purpose he had in mind."  But Windeyer J. added:

    "Nevertheless, intention is a state of mind.  The circumstances and probable consequences of a man's act are no more than evidence of his intention."

     In this case, the applicant says that Australian Rugby Football League Limited, New South Wales Rugby League Limited and each of the clubs which were parties to the various Commitment Agreements and the various Loyalty Agreements, and which it says I should find were also parties to an arrangement or understanding to the same effect, had a proscribed purpose in respect of each of the impugned provisions.  I have already stated that I accept Mr Arthurson's evidence as to his purposes, and also that his was the guiding mind of the League (i.e. of Australian Rugby Football League Limited and New South Wales Rugby League Limited) on the matter of both the Commitment Agreements and the Loyalty Agreements.  On that basis, I conclude that the purpose of the League was to preserve the quality of its rugby league competition through the joint participation of all the clubs.  Since each club, of which there was a limited number, could only have one top team, that required securing the involvement of the top teams.  Since many of the contracts relating to grounds, sponsorship, television, players and coaches and other matters, were relatively long term contracts, it was commercially necessary to be sure that the participation of the clubs would not terminate abruptly at the end of a season.  The fact that admission to the competition had previously been on an annual basis does not, and cannot, deny this obvious requirement; all it shows is that in the past no one had doubted the maintenance of this competition, which, on the evidence, had been recognised as the best rugby league competition in the world.  Having regard to the long term commitments affecting the League and the clubs, and the lead times involved in preparing a team to compete, I am satisfied that the period of five years contained in the Commitment Agreements and the Loyalty Agreements provides no ground for inferring any proscribed purpose.  It was commercially proper and, from the point of view of the parties, entirely reasonable.  Similarly, the fact that negative stipulations were involved does not, in the circumstances of this case, lead to the inference of any proscribed purpose.  They were necessary to give realistic effect to the intention to maintain the competition as a competition of the highest quality.  Since the League was investing, as it had always done, substantial efforts and resources in the development of the clubs, and was conferring large benefits on them, they were also commercially appropriate (to the extent that the League, despite its fundamental nature and objectives, was influenced by commercial considerations).  In that respect the case may be compared with Dowling v Dalgety Australia Limited (supra) and similar cases.  It is interesting to note that, when the Superleague proposal was carried into effect, very similar negative stipulations (and some more stringent controls) were exacted from the participants.  I have not overlooked the fact that they had been so organized as to avoid the impact of the Trade Practices Act, but this does  not affect the present point, which is, that the proper conduct of a competition of the highest quality, and as well ordinary commercial considerations, demand some means of ensuring that the participants enter their best teams and do not dissipate the talents available to them.

     So far as the clubs were concerned, the evidence in a  number of cases is quite express that those who made the decisions on their behalf were actuated by the desire to secure formal contractual recognition of their right to continue in the competition for the period of five years.  There is evidence that the absence of such a contractual commitment had caused problems in the past in connection with long term sponsorship agreements.  I am also satisfied that in almost every case, if not in every case, there was a strong positive desire to forward and promote a competition of which all the participants were very proud.  I am not satisfied that in any case this was not an important factor, although some
individuals, and in particular Mr Ribot, appear to have had a different view. 

     The applicant itself contended that there was a limited supply of top rugby league teams, and that there were not more top rugby league players than were required to maintain the existing competition.  This proposition was put in connection with an argument as to barriers to entry in relation to market power.  But in my opinion the argument strongly suggests that agreements designed to ensure the supply of the limited number of teams available, during a not excessive period, would be likely to have such an obvious commercial purpose as to render the purposes alleged by the applicant both unnecessary and improbable.  There was no reason why any of the parties should have had an exclusionary purpose.  If, in a particular industry, there is a limited number of suppliers of a particular product which is in short supply, and a trader with a legitimate need of all of the available product enters into an arrangement to secure it for a reasonable period, it is difficult to see why a proscribed purpose should be inferred. 

     Similar reasoning was adopted by Lockhart J. in Dowling v Dalgety Australia Limited (supra, at 134-135, 143), although that was not a case under s. 4D.  See also Dandy Power Equipment Pty Ltd v Mercury Marine Pty Ltd (supra, at 206, 208), and Stationers Supply Pty Ltd v The Victorian Authorised
Newsagents Association Ltd (1993) ATPR 41,419 at 41,440, 41,441, per Ryan J.

     In relation to the alleged purpose of preventing the acquisition of services from players, there is a special point on which the respondents rely.  This arises out of the fact, to which I have already referred, that the only services acquired from players were acquired pursuant to contracts of service, which are expressly excluded from the definition of "services" in the Act.  There is no evidence that any of the respondents had a purpose of preventing, restricting or limiting the supply or acquisition of services of this kind, the benefit of which would be obtained otherwise than under a contract of service.

     If any of the clubs or either of the bodies forming the League had any of the purposes alleged by the applicant, for the reasons I have given, I am not satisfied that that purpose was a substantial purpose within the meaning of s. 4F as it applies to s. 4D.

     In the discussion thus far, I have considered the essential preliminary question whether the clubs were relevantly competitive, and then leapt forward, as an isolated issue, to the question whether, if the clubs and the League did enter into the alleged contract, arrangement or understanding, they had a proscribed purpose.  It is now
necessary to turn back to the question whether an arrangement or understanding of the kind alleged has been made out.

     The expression "contract, arrangement or understanding" echoes language which has long been familiar in taxation law.  In the well known case Newton v Federal Commissioner of Taxation (1958) 98 CLR 1, the Privy Council considered the expression "contract, agreement, or arrangement" used in s. 260 of the Income Tax and Social Services Contribution Assessment Act 1936.  Lord Denning, who delivered the advice of the Privy Council, said (at 7):

    "Their Lordships are of opinion that the word `arrangement' is apt to describe something less than a binding contract or agreement, something in the nature of an understanding between two or more persons - a plan arranged between them which may not be enforceable at law."

It will be noticed that in this passage, Lord Denning uses the word "understanding" to explain the meaning of "arrangement".  In the context of s. 4D, where "understanding" is linked with "contract" and "arrangement", and refers to an understanding "arrived at ... between persons", who are described as "the parties to the ... understanding", it is natural to read "understanding" in the way that, to Lord Denning, the very word itself implied, that is, something of the same nature as an arrangement.

     In Top Performance Motors Pty Ltd v Ira Berk (Queensland) Pty Ltd (1975) 24 FLR 286 at 291, Smithers J. (with whom Evatt J. agreed) applied what Lord Denning had said in Newton to the construction of s. 45(2)(b) of the Trade Practices Act in which, as in s. 4D, the expression "contract, arrangement or understanding" appears.  Smithers J. also referred to what was said by Diplock L.J. in British Basic Slag Ltd v Registrar of Restrictive Trading Agreements [1963] 1 WLR 727 at 746-747, where he said:

    "`Arrangement' is not a term of art; and in section 6(3) of the Act of 1956 [Restrictive Trade Practices Act 1956 (UK)] I agree with my Lords that it bears the meaning that an ordinary educated man would ascribe to it.  It involves a meeting of minds because under section 6(1) it has to be an arrangement `between two or more persons,' and since it must be an arrangement `under which restrictions are accepted by two or more parties' it involves mutuality in that each party, assuming he is a reasonable and conscientious man, would regard himself as being in some degree under a duty, whether moral or legal, to conduct himself in a particular way or not to conduct himself in a particular way as the case may be, at any rate so long as the other party or parties conducted themselves in the way contemplated by the arrangement."

Smithers J. held that this reasoning could be applied to s. 45, and added (at 291):

    "It seems to me also that an understanding must involve the meeting of two or more minds.  Where the minds of the parties are at one that a proposed transaction between them proceeds on the basis of the maintenance of a particular state of affairs or the adoption of a particular course of conduct, it would seem that there would be an understanding within the meaning of the Act."  (Emphases added.)

This passage makes it plain that Smithers and Evatt JJ. used the word "understanding" in the sense in which Lord Denning had used it, as a kind of arrangement, and applied to it the analysis made by Diplock L.J. in British Basic Slag Ltd.  Much more recently, the Court of Appeal of New Zealand in Tararua Foundation v Liquor Licensing Authority [1995] 2 NZLR 296 at 300-301 has also applied what Lord Denning said in Newton and what was held in British Basic Slag Ltd to the construction of the word "arrangement" in a New Zealand statute.  McKay J., delivering the judgment of the Court (Cooke P., Hardie Boys and McKay JJ.) said (ibid):

    "The word `arrangement' is a word of wide general meaning, and it is not the subject of any special definition.  One can infer from this that it was intended to be construed in its ordinary or popular sense".

That sense was seen by the court as indicated by the two cases cited.

     The meaning of the expression "agreement or arrangement", as used in s. 44(2D) of the Income Tax Assessment Act 1936, was considered by the High Court in The Commissioner of Taxation of the Commonwealth of Australia v Lutovi Investments Proprietary Limited (1978) 140 CLR 434.  In that case (at 443) Gibbs and Mason JJ., in their joint judgment, drew attention to the effect of the words "entered into", which appeared in the section, as "point[ing] to an arrangement which is bilateral or multilateral".  They went on (at 444) to adopt Lord Denning's expression, explaining an arrangement as "something in the nature of an understanding which may not be enforceable at law" (emphasis added), and commented:

    "It is, however, necessary that an arrangement should be consensual, and that there should be some adoption of it.  But in our view it is not essential that the parties are committed to it or are bound to support it.  An arrangement may be informal as well as unenforceable and the parties may be free to withdraw from it or to act inconsistently with it, notwithstanding their adoption of it."

     The last passage I have cited from the joint judgment of Gibbs and Mason JJ. in Lutovi Investments has given rise to a small controversy in relation to whether an arrangement or understanding, in the context of the Trade Practices Act, must be in some sense binding, at least morally.  I do not need to go back over all that ground now, for the position has been summarized in the judgment of Fisher J. in Trade Practices Commission v David Jones (Australia) Pty Ltd (1986) 13 FCR 446 at 462-464.  Among other cases, his Honour referred to Trade Practices Commission v Email Ltd (1980) 43 FLR 383 at 397, where Lockhart J. said:

    "I incline to the view that there is no necessity for an element of mutual commitment between the parties to an arrangement or understanding such that each accepts an obligation qua the other; although in practice such cases would be rare."

Fisher J. concluded his discussion by referring to his own view, which he supported by reference to the passage I have cited from Lutovi Investments Pty Ltd, "that a meeting of minds of the parties to the alleged understanding was the essential feature".  So far as the acceptance of an obligation is concerned, he thought this could be satisfied "if one only of the parties accepts an obligation qua the other or others".

     It seems to me that light is thrown on the effect of the reservation made by Gibbs and Mason JJ. in Lutovi Investments Pty Limited, that "it is not essential that the parties are committed to [an arrangement] or are bound to support it", if regard is paid to the dissenting judgment of Bowen C.J. in the court below, a judgment which prevailed in the view of the majority of the High Court.  In Federal Commissioner of Taxation v Lutovi Investments Pty Ltd (1978) 20 ALR 157 at 163, Bowen C.J. said:

    "In attempting to identify an arrangement for the purpose of s 44(2D)(b), one helpful guide is to determine whether any party who failed to take one of the steps set out above, would thereby have become liable to censure by another party for breach of a moral obligation arising under the arrangement, whether or not the latter party could avail himself of a legal remedy.  This, though, need not be an essential feature of an arrangement.  There may, for example, be a consensus as to a convenient course of procedure, a subsequent dissent from which might carry no obloquy.  It can nevertheless be an arrangement."

This passage supports the view that arrangements without obligation are likely to be uncommon, and that the exception relates to the possibility of something in the nature of a change of mind, and does not imply that you can have an arrangement or understanding so amorphous that no one can be
expected to act pursuant to it.  That being so, the test suggested by Bowen C.J. is a practical test which will generally be of assistance when the court is considering whether any arrangement or understanding has been shown, although it will not of itself be decisive.

     What this brief survey of the authorities has shown will be decisive is the answer to the question whether some meeting of the minds of the persons alleged, in the words of s. 4D(1)(b), to be "parties to the contract, arrangement or understanding" has been established.  In Trade Practices Commission v Email Ltd (1980) 31 ALR 53 at 56, Lockhart J. said:

    "For there to be an arrangement or understanding there must be a meeting of the minds of those said to be parties to the arrangement or understanding.  In some cases this may be inferred from circumstantial evidence.  There must be a consensus as to what is to be done and not just a mere hope as to what might be done or happen.  Independently held beliefs are not enough ... ."

In Stationers Supply Pty Ltd v The Victorian Authorised Newsagents Association Limited (supra, at 41,442) Ryan J. said:

    "The first question is whether there is any understanding between newsagents to which Newspower Victoria is also a party.  It is obvious that the `Newspower' arrangements required the acceptance of individual newsagents which, it may be inferred, would not be forthcoming if it were regarded as unlikely that other newsagents would join.  Clearly, there must have been an expectation that other newsagents would participate in the `Newspower'
arrangements.  However, an expectation of that kind does not carry with it an understanding, arrived at between newsagents, to enter into membership agreements.

          The applicant must go further and establish an understanding between newsagents because Newspower Victoria and newsagents are not, as between themselves, competitors in any market.  I can discern, however, no evidence which establishes an understanding between newsagents.  In my view, it is necessary to establish something more than a hope or expectation that a certain outcome will occur before the Court can find that an understanding exists.  The applicant failed to make out its claim under this provision of the Act."

     It seems to me that where a trade association enters into a number of separate agreements with its members, or a large corporation operating at the wholesale level of the market enters into a number of separate agreements with different retailers, it may or may not be possible to infer a "horizontal" arrangement or understanding between those members or retailers, underlying or growing out of the series of "vertical" agreements.  The members or retailers will have both conflicting interests and interests in common, and are likely to be acting in accordance with the dictates of commercial practice.  In a particular case, as in British Basic Slag Limited (supra), communication between their representatives may quite apparently have occurred in circumstances where a wink or a nod might easily have sufficed to set in place a plan of action.  Any paucity of evidence of direct and express communication between them may be accounted for by their alertness, as commercial people, to the existence of competition laws.  They may have been careful to conceal overt contacts which did occur, or careful to avoid the occurrence of any such contacts by the substitution of winks and nods.  If the court can be satisfied that the parties intended each other to draw inferences of mutual acceptance of obligations without open statements being made, it is appropriate that the court should draw the same inferences those parties expected each other to draw.  But here the chairmen and chief executives of the clubs included many persons who were relatively unsophisticated where the Trade Practices Act was concerned, and I am satisfied generally did not advert to it at all.  It is therefore much more significant, in this case, that there is no evidence on which I could find any actual horizontal communications of intent that formed the basis of the execution of the individual Commitment Agreements.  Particularly as several of the clubs changed sides subsequently, there would have been abundant evidence had such communications actually occurred.  This case is not at all like British Basic Slag Limited, where every actor could be assumed (sub silentio) to be playing his part according to carefully defined and well understood rules of a highly sophisticated sort. 

     At the same time, the setting in which a "horizontal" arrangement or understanding is alleged to have been made or reached is very important.  The relationship of the clubs to the League is not like that of the members of a trade association, and certainly not like that of a group of retailers to a large wholesaler.  As I have already found, the League is a special body, which has grown out of aims that are not commercial and has objectives appropriate to those aims, to which like-minded clubs have joined themselves with the intention of conferring upon it controlling powers, designed to be exercised in the pursuit of their common aims and objectives.  The peculiar relationship of the League with the clubs must be taken into account.  The roots of the clubs and the League, and of the active spirits involved in them, deeply embedded in community, youth and sporting interests, are likely to have led the deciding minds in directions other than those that might have appealed to purely commercial concerns.  No arrangement or understanding between the clubs, in the sense expounded in the cases, is necessarily to be inferred from the Commitment Agreements or the Loyalty Agreements, or from what was said at meetings where they were discussed.  Everything said and done was consistent with an affirmation of the relationship binding each club to the League, an affirmation which neither required nor in itself implied entry into the suggested arrangement or understanding.  Control having been committed to the League, with which the clubs had established strong links from the beginning, links that had developed and strengthened over the years, those involved would have had every reason to be content to reach their understandings directly with the League, and not as between the clubs.  The League was the controlling body, and decisions about the competition were to be made by it.  People, of course, sometimes do what is unnecessary; but when an arrangement or understanding is both unnecessary and denied by a number of acceptable witnesses, I do not think the Court should conclude that the alleged arrangement or understanding was nevertheless reached.  I found the evidence of the witnesses who denied it to be persuasive. 

     Repeatedly, during the hearing, it was asserted on behalf of News Limited that an important purpose of the incorporation of the League was to constitute a body which could impose on the clubs the "hard decisions".  Consistently with the applicant's own case, what the League did when it sent out the Commitment Agreements, and later when it called for the Loyalty Agreements, was to take the decisions itself to seek those agreements from each club.  It will be remembered that the Commitment Agreements were sent out, and almost all of them were executed, before the November meeting.  In the case of the Loyalty Agreements, the February meeting was told they would be required, but there was not even a draft available at the meeting, and it was clear they would be sought by the League from each club individually.  Even Mr Politis's resolution was not framed in terms appropriate to an attempt to reach an arrangement between the clubs, but as a recommendation to the board of the League on which it could act as it chose, and which in fact it rejected.

     It is very significant that the applicant, having access to evidence obtainable from the "rebel" clubs, did not allege any kind of arrangement arrived at by communications between them directly, or through intermediaries, even by winks or nods, to the effect that the Commitment Agreements or the Loyalty Agreements would be entered into.  Rather the case put was that the Commitment Agreements and Loyalty Agreements, in each case taken together, contain provisions of contracts, arrangements or understanding arrived at between the clubs.  The written submissions for the applicant enumerate the points that the agreements were identical in terms (with some exceptions); that the representatives of each club knew that all other clubs either had been or were to be invited to sign and that there was urgency; that beliefs were stated by certain influential club members about the need for the agreements, which were said to require signature by all or most of the clubs for the agreements to be effectual; that many club representatives believed the purpose of the Commitment Agreements was to ensure participation for the following five years, being a purpose that could not be achieved unless all (really a majority) of the clubs entered into the agreements; that there was a need for protection against any threat from News Limited, which again would require that most clubs participate promptly; that an inference, it was said, arose from language used by Mr Quayle (but I do not think the passages quoted have any substantial significance); and that the haste with which the Commitment Agreements had to be signed deprived (it was said) the fact that there were twenty of them, not one, of significance.

     A case so framed, in my opinion, inevitably collides with the principle stated by Lockhart J. in Trade Practices Commission v Email Ltd (supra, at 56) and Ryan J. in Stationers Supply Pty Ltd v The Victorian Authorised Newsagents Association Limited (supra, at 41,442).  That principle cannot be evaded, on the facts of this matter, by any appeal to circumstantial evidence.  Numbers of the responsible persons involved gave direct evidence, and that direct evidence makes it impossible to draw any inference of an actual arrangement or understanding expressly concluded.  What the applicant has to do is rely on an implicit arrangement or understanding.  But the evidence does not go far enough to establish that, having regard to the authorities to which I have referred and to my findings.

  DID THE PARTIES TO THE COMMITMENT AND LOYALTY AGREEMENTS

       MAKE PROVISIONS HAVING THE PURPOSE OR EFFECT OF

            SUBSTANTIALLY LESSENING COMPETITION?

     It was accepted that questions relating to s. 47 were no longer in the case.  But the Further Amended Statement of Claim alleged contraventions of s. 45(2)(a)(ii) and 45(2)(b)(ii) of the Act, which refer to a provision of a contract, arrangement or understanding that has the purpose, or would have or be likely to have the effect, of substantially lessening competition.  By s. 4G, "references to the lessening of competition shall be read as including references to preventing or hindering competition", and by s. 45(3) it is necessary to understand "competition", in relation to a provision of a contract, arrangement or understanding, as referring to competition in any market in which a corporation that is a party supplies or acquires, or is likely to supply
or acquire, goods or services.  The full terms of this provision are set out earlier in these reasons.

     I have already held that the markets propounded by the applicant have not been established, and that the claims under s. 45(2)(a)(ii) and (b)(ii) accordingly fail.  But in view of the arguments that were advanced at the hearing, I should add that, having regard to the considerations which influenced me in declining to accept that a contract, arrangement or understanding had been reached satisfying the requirements of s. 4D, I find that no contract, arrangement or understanding has been established to satisfy the provisions now under consideration either.  And just as I was not satisfied of the purpose alleged under s. 4D, neither am I satisfied of the purpose of "substantially lessening competition" the subject of these other provisions.

     Detailed submissions were put to me as to how one should approach the question whether competition is or is likely to be substantially lessened.  However, it is not possible to discuss that matter meaningfully without identifying the market within which the effect or effects on competition must be assessed. 

                       MONOPOLIZATION

     Again, this is an aspect of the case which I have already held must fail because none of the markets propounded was established.  Had the applicant proved the existence of one of the markets it put forward, questions would have arisen as to whether the League has "a substantial degree of power" in that market, and whether it has "take[n] advantage of that power for the purpose" of doing any of the things specified in s. 46.  It is impossible to consider whether the League has a substantial degree of power in a market until a market that exists has been delineated, and evidence has been given about it.  But it can be said that the power to exclude teams from the competition, on which the applicant's submissions placed reliance, arose out of the functions of the League within a co-operative venture, the constitution of which committed this power to it for the mutual advantage of all participants and so that, inter alia, the "hard decisions" could be reached.  However the market is delineated, there is a difficulty in regarding the exercise of this power, assuming it was exercised, as amounting to taking advantage of market power.

     So far as purpose is concerned, I have already indicated the purposes for which I find the Commitment and Loyalty Agreements were entered into, and I do not think those purposes included as a substantial purpose any of the purposes set out in s. 46(1).  See s. 4F.

            DISCRETION TO GRANT OR REFUSE RELIEF

     If I had found any part of the applicant's case established, the question would have arisen whether the relief sought should have been granted.  The applicant did not ask merely for the setting aside of contractual obligations; it asked to have the Commitment and Loyalty Agreements set aside ab initio.  The purpose and effect of relief in this form appear to be to avoid the cross-claims for the inducement of breach of contract and other cross-claims that depend on the existence at the date of the breaches alleged of the obligations now sought to be set aside.  As counsel for the respondents point out, the clubs have already had the benefit of the Commitment and Loyalty Agreements for the first year of their operation, and it would be unusual to set them aside ab initio.

     A contravention of s. 45 or of s. 46 of the Trade Practices Act does not have an automatic effect upon an agreement in the conclusion of which the contravention was involved.  But the Court is empowered to grant relief, and in particular may grant injunctive relief pursuant to s. 80, and further relief under s. 87.  By s. 80AA(1) (subsequently repealed), in certain cases involving contraventions of s. 45, the Court was specifically empowered to grant a discretionary stay of any injunction for a period that might be unlimited.  Sub-section (3) provided:

    "Nothing in sub-section (1) affects the powers that the Court has apart from that sub-section."

Plainly, this envisaged and preserved wide discretionary powers in the Court in the case of a contravention of s. 45.  There is no reason to think that those powers would be any more restricted in the case of s. 46.

     In ICI Australia Operations Pty Limited v Trade Practices Commission (1992) 38 FCR 248, the Full Court considered a case where a trial Judge had taken the view that s. 80 conferred on him a discretion "to refuse to grant an injunction in an appropriate case", rather than a discretion to grant it.  The Full Court held that this was an error.  Lockhart J. said (at 258):

    "To require, rather than permit, the court to grant an injunction once the prohibited conduct has been proved could deny the Court its capacity to formulate the appropriate remedy to suit the needs of the case and could be productive of injustice.  The evident intent of s 80 is to place the weapon of an injunction in the discretionary armoury of the Court together with the award of damages and wide ranging orders of the kind specified in s 87."

Gummow J. made it clear (at 266-268) that, with certain exceptions which he set out, "the statutory remedy provided for in s 80 of the Act ... is not ... fundamentally distinct from the equitable remedy".  French J. said (at 268):

    "I accept that s 80(1) which empowers the Court by providing that it `may grant an injunction' does not thereby establish a presumption in favour of such a grant where a contravention or proposed contravention of the Act is made out."

He referred to `the broad nature of the discretion', and added:

    "The remedy is flexible and may be applied in service of a variety of functions to support the policy of the Act."

     That the statutory discretion may have regard to broad discretionary considerations had earlier been affirmed in World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181 at 186-187 per Bowen C.J., and 199 per Brennan J.  I referred to the discretionary nature of the remedy in Trade Practices Commission v Glo Juice Co Pty Ltd (1987) 73 ALR 407 at 410 and 413-416, citing a number of earlier authorities, including Mikasa (N.S.W.) Pty. Limited v Festival Stores (supra), where the High Court considered the injunctive power conferred by the earlier Trade Practices Act 1965 in relation to the practice of resale price maintenance.  In that case, Walsh J. said (at 649) that "the Court has to determine whether an injunction should be granted and, if so, what the terms of the injunction should be", while Gibbs J. referred (at 651) to the fact that "an injunction is in its nature a discretionary remedy". 

     Once it is accepted that the remedy sought by the applicant is the subject of a wide discretion in the Court, the applicant must be faced in this case with very great difficulties.  Counsel recognized this, and sought to overcome the problem by urging upon me repeatedly that the Court should not withhold relief under the Trade Practices Act upon some view as to the desirability of the Act applying to particular conduct in particular circumstances.  That, counsel said, would be a question for the Trade Practices Tribunal to consider upon an authorization application.

     Accepting that counsel's point would, in general, be correct, I am not sure that it was not too broadly put.  The courts in the United States have developed a doctrine, in this area of competition law, to which I referred in an earlier portion of these reasons, known as the "Rule of Reason".  If I had accepted the applicant's case as establishing a submarket, confined to rugby league, which should be regarded as a market for the purposes of ss. 45 and 46, the question would have arisen whether relief should not be refused, as an American court might refuse it, on the ground that the conduct in question was really pro-competitive within a wider market that also existed.  Upon the view of the law that I have accepted, that question may never arise in Australia; but if that view is erroneous, the question whether the wide discretion conferred by s. 80 does not demand that a court consider the very sorts of issues that would arise upon an authorization application may have to be faced.  If narrow markets are to be found, they will undoubtedly exist within what economists would regard as wider markets, and injunctions to restrain conduct within a narrowly defined market may in fact be anti-competitive upon a true view of the whole of the market forces in operation.  If that is the position, and an injunction would not serve the purposes of the Act, a construction of s. 80 which narrowed the discretion, so as to deny the Court the power to recognize the effect of the relief it was being asked to grant, would be a construction that should not be accepted.

     However, in the circumstances of this case, a clear answer to counsel's point is that it does not face up to the full implications of the discretionary nature of the remedy, as it was explained by the High Court in Mikasa (N.S.W.) Pty Ltd v Festival Stores and by the Full Court in ICI Australia Operations Pty Limited v Trade Practices Commission.  The applicant here engaged in self-help in an extreme form by the conduct I have earlier described.  That conduct included inducing persons to act in breach of their contracts (a form of conduct which numerous authorities have described as "unlawful": see Building Workers' Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104 at 141), and included offering indemnities to the officers of clubs in respect of breaches of duty towards their own clubs, and to the clubs in respect of breaches of their obligations under the very agreements which are now sought to be set aside ab initio, but which were clearly in law extant then, and will remain so now unless the Court makes an order pursuant to s. 87 or otherwise setting them aside.  The conduct of the applicant was accompanied by the extraordinary actions I have recounted, which can only be regarded as well outside the norms of proper and acceptable commercial conduct. 

     No doubt it would only be in exceptional cases that the Court would exercise its discretion whether to grant relief for a contravention of s. 45 or s. 46 by withholding any remedy.  But this is an exceptional case.  In Eastern Express
Pty Limited v General Newspapers Pty Limited (supra, at 72), Lockhart and Gummow JJ. said:

    "This Court should be vigilant to ensure that its jurisdiction is not invoked to interfere with normal and legitimate competitive pricing activities in the relevant market under the guise that such activities are predatory."

Similarly, I think the Court should be vigilant to ensure that its remedies are not invoked for the furtherance and ultimate fulfilment of unlawful activities.  In the circumstances as I have found them, it would be a mockery of the rule of law if the Court, finding a breach, were tamely to grant the applicant the relief it seeks, without having any regard to the applicant's own conduct.  In one of literature's great passages, when Aeneas attempts to excuse his desertion of Dido by asserting that he must go to perform a God-given task, Dido exclaims with scorching sarcasm that here is a man who would make the Gods accomplices to his crime! -

    "I rave, I rave!  A god's command he pleads,

     And makes Heav'n accessory to his deeds."

     (Aeneid, Book 4, Dryden translation.)

The law must not incur the reproach, in solemn earnest, of being accomplice to the inducement of breach of contract and the corruption of fiduciaries.  If I had found a contravention of s. 45 or s. 46, in the very special circumstances of this case, I would have declined to grant News Limited the discretionary relief sought by it.

                           DURESS

     Although the applicant, in its case under s. 45 and s. 4D of the Trade Practices Act, asserted that the execution of the Loyalty Agreements, in the circumstances in which they were executed, required the Court to conclude that there was an arrangement or understanding between the clubs in terms of the provisions of those agreements, at the same time the clubs aligned with News Limited brought cross-claims to have the Loyalty Agreements set aside on the ground of duress alleged to have been exercised by the League.  The threat said to have been made in respect of each Loyalty Agreement was that, if the particular club did not execute and return it by a specified time and date, the Australian Rugby Football League Limited and the New South Wales Rugby League Limited would exclude the club and its teams from entering and participating in the national competition in 1995 and thereafter.  It was also pleaded that the Commitment Agreement was the subject of a similar threat, and that in each case the agreement was executed under economic duress and is voidable.  Although the cross-claims thus refer both to the Loyalty Agreement and the Commitment Agreement, the written submissions presented by counsel were limited to the Loyalty Agreement in each case.

     The law relating to duress was stated by McHugh J.A. (as he then was) in Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 at 45-46 in a judgment with which Samuels and Mahoney JJ.A. agreed.  It was also a judgment which received the approval of four of the Law Lords, expressed by Lord Goff of Chieveley, in Dimskal Shipping Co. S.A. v International Transport Workers Federation [1992] 2 AC 152 at 165-166.  In the former case, McHugh J.A. said (at 45):

    "The rationale of the doctrine of economic duress is that the law will not give effect to an apparent consent which was induced by pressure exercised upon one party by another party when the law regards that pressure as illegitimate: Universe Tankships Inc of Monrovia v International Transport Workers Federation [1983] 1 AC 366 at 384 per Lord Diplock."

And (at 46) he added:

    "The proper approach in my opinion is to ask whether any applied pressure induced the victim to enter into the contract and then ask whether that pressure went beyond what the law is prepared to countenance as legitimate?  Pressure will be illegitimate if it consists of unlawful threats or amounts to unconscionable conduct.  But the categories are not closed.  Even overwhelming pressure, not amounting to unconscionable or unlawful conduct, however, will not necessarily constitute economic duress."

In the latter case, Lord Goff said (at 165):

    "We are here concerned with a case of economic duress.  It was at one time thought that, at common law, the only form of duress which would entitle a party to avoid a contract on that ground was duress of the person.  ...  [I]t is now accepted that economic pressure may be sufficient to amount to duress for this purpose, provided at least that the economic pressure may be characterised as illegitimate and has constituted a significant cause inducing the plaintiff to enter into the relevant contract".

     The illegitimate pressure said to have been exerted in the present case stemmed, it is alleged, from two matters.  The first was Mr Politis's motion at the meeting on 6 February 1995, followed by the terms of the letter of 7 February 1995 with which the draft Loyalty Agreement was sent to the chief executive of each club.  That letter included the statements:

    "The League will view the failure of any club to sign and return the Deed by the deadline as an act of gross disloyalty." 

And:

    "I also refer you to yesterday's meeting of the League which passed a resolution to recommend that the Board of the League consider the expulsion of any club which fails to sign and return the Deed by the deadline." 

The other matter was a statement made by Mr Packer, in the course of his address to the meeting of 6 February 1995, that he would sue any club or any person that sought to interfere with his rights in respect of the televising of rugby league.  Mr Arthurson was said to have adopted these remarks by acquiescence in what was said.  Reliance, in the latter regard, is placed on evidence of Mr Ribot not expressly denied by Mr Arthurson.

     The second matter can be quickly disposed of.  I have already said that I do not regard Mr Ribot as a reliable witness.  He was apt to colour his evidence to suit the contentions he was supporting.  But in any case, I do not think a vigorous assertion by Mr Packer of legal rights, which there is no reason to doubt Channel Nine genuinely claimed to hold, could have amounted to duress exercised by the League.  If Mr Arthurson expressed concurrence with Mr Packer's attitude, that also would be likely to have fallen far short of picking it up and using it as an illegitimate threat by the League.  I have not been persuaded that anything said by Mr Arthurson had that effect.

     As regards the other matter, it must be borne in mind that the League had a legitimate interest in the competition not being fragmented, so that it could be maintained at the very high level which had made it so desirable a prize in the eyes of News Limited.  I have already set out clauses from the constituent documents of the League which demonstrate the intention of those who founded it, who were also representatives of the clubs, to confer on it a power of control.  I have also referred to the repeated submission put on behalf of the applicant during the hearing that the League had failed to exercise that power as it should have done by excluding clubs the economic weaknesses of which tended to enfeeble the whole competition.  It is impossible to reconcile that contention with the proposition that the League would not have been entitled to exclude a club for enfeebling the competition more completely, by what was genuinely seen as gross disloyalty.  Nothing suggests that such a perception of any refusal by a club to sign the Loyalty Agreement would have been other than genuine.  In these circumstances, even if the letter of 7 February 1995 should be understood precisely in the way the cross-claimant clubs contend for, I do not think any pressure on this basis has been shown to have been illegitimate.

     In any case, I am not satisfied that, in the language of Lord Goff of Chieveley, the alleged pressure "constituted a significant cause inducing [each club] to enter the relevant contract".  The evidence on this subject was extremely equivocal.  Mr Maranta, for instance, a director of the Brisbane Broncos, gave evidence that he considered the Commitment Agreement attractive to his club, and that he was also happy in principle with the Loyalty Agreement after some legal details had been clarified.  According to Mr Ribot, Mr Morgan, the Chairman of the Brisbane Broncos, said at the time: "We should be cracking champagne.  We are in the competition for five years".  Mr Moore, whose evidence in chief on this subject, as on a number of others, I do not accept, conceded in cross-examination: "No, to be quite honest with you sir, I was quite happy to sign the Loyalty Agreement".  He also said in cross-examination, to the contrary of his evidence in chief, that the possibility of Canterbury not being admitted into the 1995 competition was something he never seriously entertained at any time.  Sir Roger Douglas of Auckland said he was content to sign the Loyalty Agreement, which was executed after a unanimous vote of the Auckland Board.  He did say, with reference to the earlier Commitment Agreement, that he believed if Auckland did not sign it would have to show the League why its participation should not be immediately revoked.  But this was not grounded on any threat; I think it showed a proper appreciation on Sir Roger's part of the implications inherent in the relationship between the League and the clubs, and in the nature of the joint activity in which they were involved as participants in the Premiership Competition.  Mr Gow of Cronulla was one of the witnesses who appeared to me in cross-examination to be unreliable.  However, on the issue of the Loyalty Agreement, his evidence was far from suggesting any clear picture of duress, and he conceded that he saw the Commitment Agreement as a definite advantage to Cronulla.  Mr McLean of North Queensland gave evidence of an express threat by Mr Arthurson at the February meeting that "any club that does not comply [with the request to sign the Loyalty Agreement] will be out of the competition".  This does not appear to have been heard by other witnesses, and I think it is likely Mr McLean was mistaken.  In any case, the evidence of Mr Boustead shows that the club's board took the view that the agreement was favourable to the club.  Likewise, the Western Reds regarded, on the evidence, acceptance into the competition for five years as attractive, and there was no problem about signing the Loyalty Agreement.  Mr Cowan of Penrith gave evidence that he was heavily influenced by the risk of expulsion in relation to the Loyalty Agreement, but he also said his expression of support for the League at the meeting of 6 February was genuine, and that Penrith was happy to sign the Loyalty Agreement.  Mr Neil of Canberra gave evidence of a threat of expulsion, but conceded in cross-examination that he did not believe Canberra would be expelled, and that when the deed was actually executed by Canberra, the club was not operating under any threat or fear of expulsion.

     In my opinion the evidence for the clubs that have cross-claimed on the ground of duress does not, in any case, come up to the standard set by Lord Goff.  I think, too, that the considerations discussed by Kirby P. (as he then was) in Equiticorp Finance Ltd (in liq) v Bank of New Zealand (1993) 32 NSWLR 50 at 106-109 support adherence to the standard which Lord Goff stated.

     Accordingly the cross-claims on the ground of duress will be dismissed.

              CROSS-CLAIMS - BREACH OF CONTRACT

     Australian Rugby Football League Limited and New South Wales Rugby League Limited have brought cross-claims in contract against the clubs aligned with News Limited.  Four contracts are alleged:

(a)  A contract between the members of New South Wales Rugby League Limited, including the representative members appointed by the clubs, and the company constituted by its memorandum and articles of association, being a contract under which each club agrees to observe and perform the provisions of the constitution of the League as in force for the time being so far as those provisions are applicable to that club (see s. 180 of the Corporations Law);

(b)  A contract made in May 1994 between each club and New South Wales Rugby League Limited comprised by the application for admission to the 1995 Competition and the acceptance of that application, a term of which was that each club would observe the memorandum and articles of association and the rules and regulations of New South Wales Rugby League Limited;

(c)  The Commitment Agreement made between the League and each club in November 1994;

(d)  The Loyalty Deed made between the League and each club in February 1995. 

     It is conceded by the cross-respondents that if the Loyalty Agreements are valid, each of the cross-respondent clubs is in breach of it by virtue of the making of players available to enter into and perform employment contracts with a Superleague franchisee.  I have rejected grounds on which the Loyalty Agreements were attacked, except that the Brisbane Broncos club has raised a special argument that, in its case, the deed was executed in escrow, and I have not yet dealt with that argument.  However, other obligations are alleged to have been broken, and it is necessary to give consideration to them.

     The first of the contracts alleged arises out of article 2(2)(c) of the League, which includes in its members "Two representatives from each club".  Article 7 then provides:

    "Each Club shall be entitled to nominate two (2) eligible persons for membership one of whom shall be the Secretary or other full-time executive or administrative officer of the Club for membership of the League."

As Hodgson J. said in Wayde v New South Wales Rugby League Ltd (unreported, S.C., 10 December 1984) at 26 the members nominated "are members in their capacity as representatives of clubs".  It was on this basis that he went on to hold that the directors would owe a duty towards the clubs represented by representative members. 

     The relevant provisions of the memorandum, articles and regulations, thus said to constitute contractual obligations, include cl. 3, significant parts of which I have already quoted, and in particular cl. 3(b) conferring on the League a power "[t]o foster and control the game of rugby league ... and generally to take such action as may be considered conducive to its best interests", and cl. 3(f) "to regulate and control the operation of all member bodies and affiliates".  Reliance is also placed on cll. 19 and 20 of the articles which confer powers of expulsion of a member for "conduct which, in the opinion of the Board of Directors, is unbecoming of a member or prejudicial to the interest image or welfare of the League", and of exclusion of a club from "representation on the League" if the club shall "be guilty of conduct which in the opinion of the League is unbecoming of a Club or Association or is prejudicial to the interests, image or welfare of the League".  It is submitted that the evident intent of these provisions is that a member, and a club represented by a member, are bound not to engage in conduct unbecoming of a member or a club, as the case may be, or prejudicial to the interests, image or welfare of the League; and also not to act in such a way that the objects of the League could not be fulfilled - in particular, the object of fostering and controlling the game of rugby league football throughout New South Wales and the Australian Capital Territory.  Reliance is placed on the principle that every contract involves an implied obligation on each party to do all that is reasonably necessary to secure performance of the contract, and to do all such things as are necessary on his part to enable the other party to have the benefit of the contract: Secured Income Real Estate (Australia) Limited v St. Martins Investments Proprietary Limited (1979) 144 CLR 596 at 607. 

     In response to these submissions, the cross-respondents say that the representatives are delegates of the clubs, not agents.  The submission continues:

    "Any obligation on the part of the Clubs to abide by the Memorandum and Articles of the League flows from the application to participate in the competition and from the fact of participation."

It is then submitted that there is not in the articles an obligation not to act in a manner prejudicial to the interest or welfare of the League, but merely a provision that if a member or a club does so act, certain consequences may follow.  But to construe a contractual term in this way, unless the language is intractable, seems contrary to the statement of Windeyer J. in Coulls v Bagot's Executor and Trustee Company Limited (1967) 119 CLR 460 at 504:

    "The primary obligation of a party to a contract is to perform it, to keep his promise.  That is what the law requires of him.  If he fails to do so, he incurs a liability to pay damages.  That however is the ancillary remedy for his violation of the other party's primary right to have him carry out his promise.  It is, I think, a faulty analysis of legal obligations to say that the law treats a promisor as having a right to elect either to perform his promise or to pay damages.  Rather, using one sentence from the passage from Lord Erskine's judgment which I have quoted above, the promisee has `a legal right to the performance of the contract'."

See also Ahmed Angullia bin Hadjee Mohamed Salleh Angullia v Estate and Trust Agencies (1927), Limited [1938] AC 624 at 634.

     No authority was cited as to the effect of the appointment by a club of a representative member of the League, apart from the unreported decision of Hodgson J. in Wayde.  It seems to me that the fact that these articles were adopted upon the decision to incorporate the League, which was undoubtedly taken on behalf of the clubs and with their approval; that the memorandum and articles contain provisions plainly expressing a close relationship between the League and the clubs, in which the League was to have a controlling part; and that after the League had been so constituted the clubs chose to nominate their representatives as members of it, all point to the conclusion that the nominated members were intended to stand in the place of the clubs as members, and in that sense were truly their agents.  The Shorter Oxford English Dictionary (3rd ed., reprint issued 1980) defines the noun "representative", relevantly, as "A person ... representing a number or class of persons", or "One who ... represents a number of persons in some special capacity", or "One who represents another as agent, delegate, substitute, successor or heir".  Given these meanings, and clauses of the kind I have mentioned indicating an intention that clubs will be bound in some respects by what the League does, it seems to me that the conclusion should be drawn when a club nominates a representative and he becomes a member, that he is an agent through whom the club itself becomes bound by the statutory contract binding members.

     However, the cross-claimants do not depend on this proposition alone.  As I have said, they rely also on the terms of admission of clubs to the 1995 competition, secured by the submission of a form which included the following:

    "The club agrees that if it is admitted to the Competition:

     1.   the club will abide by the Memorandum and Articles of Association of the League and the Rules and decisions of the Board of Directors
of the League and its Committees made pursuant thereto."

To this proposition there does not really seem to be any answer, apart from a contention that the contract so made does not involve Australian Rugby Football Limited, since "the League" in this context refers to New South Wales Rugby League Limited.  That seems to be correct.

     Although New South Wales Rugby League Limited is conducting the Premiership Competition on behalf of Australian Rugby Football League Limited, it plainly has in relation to that competition an interest of its own to serve, which exists alongside of its agency functions.  In my opinion, it is entitled to enforce the contract constituted by the acceptance of the application, a contract which refers to its own memorandum, articles, rules and the decisions of its board of directors and committees. 

     I turn to the Commitment Agreement.  The submissions for the cross-respondents state:

    "Any `obligation' to play in that competition [the Premiership Competition] can only be derived from the Commitment and Loyalty Agreements, the validity of which is attacked on Trade Practices grounds."

I have rejected the trade practices grounds, and the League relies on the obligation contained in cl. 1 of the Commitment Agreement "to participate in the National Competition for the [1995-1999] playing seasons ..., and not to participate in any other competition not conducted or approved by the ARL and NSWRL."  In addition, it is claimed that there are implied terms by which each of the clubs:

    "(a)  promised to act in good faith with fair dealing towards the NSWRL and ARL;

     (b)  promised to act reasonably and honestly with regard to the contractual interests of the NSWRL and ARL;

     (c)  promised to do all such things as were necessary to allow the NSWRL and ARL to have the benefit of their contractual rights and interests under the agreements;

     (d)  would perform obligations in substance the same as those set out in clauses 1.1, 1.2, 1.3, 2.1(a) and 2.1(b) of the Loyalty Deed."

Further, since it is not possible for a club to participate in more than one top competition at a time, or, of course, to participate without its team, an implied term is alleged that a club would not act in such a way as to deprive itself of the capacity to fulfil its obligation to participate by releasing its players and signing away its sponsors, name, logo, jerseys and ground lease. 

     In support of the implication of terms to these effects, counsel relied on a number of cases, including Nullagine Investments Pty Limited v The Western Australian Club Incorporated (1993) 177 CLR 635 at 647-8 and 659; Ansett Transport Industries (Operations) Pty Limited v The Commonwealth of Australia (1977) 139 CLR 54 at 61 (in the dissenting judgment of Barwick C.J.); Lloyd's Ships Holdings Pty Ltd v Davros Pty Ltd (1987) 17 FCR 505 at 532-533, citing Trego v Hunt [1896] AC 7; Byrne v Australian Airlines Ltd (1995) 69 ALJR 797 at 817, where McHugh and Gummow JJ. cited Nullagine Investments Pty Ltd for the proposition:

    "Many of the terms now said to be implied by law in various categories of case reflect the concern of the courts that, unless such a term be implied, the enjoyment of the rights conferred by the contract would or could be rendered nugatory, worthless, or, perhaps, be seriously undermined."

     There is also a separate obligation in the Commitment Agreement to observe the terms of the articles of association and regulations of the New South Wales Rugby League Limited; and, of course, the obligations in the Commitment Agreement are, in each case, repeated in the Loyalty Deed, which also makes express a number of the obligations said to be implied in the Commitment Agreement.

     There is some controversy as to whether there is generally a contractual obligation of good faith: see for example Amann Aviation Pty Limited v Commonwealth of Australia (1990) 22 FCR 527 at 532, 542; Renard Constructions (ME) Pty Ltd v Minister of Public Works (1992) 26 NSWLR 234 at 263-268; Service Station Associations Limited v Berg Bennett & Associates Pty Limited (1993) 45 FCR 84.  But it seems to me that a contract of the kind that the Commitment Agreement represents, made between parties involved in the conduct of a sporting competition, is in a special position, for reasons elaborated at length in United States authorities to which I have already referred.  Accordingly, I think the suggested implications should be made.  In any event, the implication that a club would not deprive itself of its team or otherwise deprive itself of the capacity to fulfil its obligation under the Commitment Agreement to participate in the competition seems plainly appropriate.  See City of Camberwell v Camberwell Shopping Centre Pty Ltd [1994] 1 VR 163 at 186-187. 

     It was suggested that the consideration for the Commitment Agreement might be illusory.  However, it seems to me that a promise to admit a club to the competition for a period, notwithstanding that during that period powers of exclusion would exist, is not illusory.  There is a real difference between an admission which is defeasible in certain circumstances and a lack of admission altogether, notwithstanding any right of application. 

     The contractual obligations having been found, breach is not open to doubt.  The cross-respondent clubs broke those obligations by releasing players and/or threatening to do so, encouraging their sponsors to support a different entity, the Superleague franchisee, licensing the franchisee to make use of club names, logos and jerseys, and giving up their own use of their grounds and their own capacity to participate in the competition conducted by the League.  These actions were plainly prejudicial to the interests of the League, and thus in breach of the contract constituted by the articles of association.  They were also in breach of specific and implied terms of each Commitment Agreement and Loyalty Deed.

                 INDUCING BREACH OF CONTRACT

     New South Wales Rugby League Limited and Australian Rugby Football League Limited also sue News Limited, Star League Pty Limited and the franchisee companies for unlawful inducement of breaches of the contractual obligations of the clubs owed to the League.  To maintain an action upon this tort, what was incumbent upon the cross-claimants was to show that the cross-respondents had the intention to procure a breach of contract; that they did in fact induce it; and that damage was a consequence.  The element of intention is the gravamen of the tort: Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd (1995) 130 ALR 469 at 484-486.  In this case, there is no doubt on the evidence that all the cross-respondents were very well aware of the situation, and acted intentionally.  There had been a careful and meticulous examination of the structure of the League and the clubs, including their contractual arrangements.  Mr Smith and Mr Cowley had access to a number of senior club officials, as well, of course, as the active assistance of Mr Ribot.  The inference that they would have obtained knowledge of the relevant contracts is strong, and they have not gone into the witness box to deny it.  The indemnities are additional evidence of their knowledge, as well of course as potent evidence of the direct steps they took to induce the breaches of contract that occurred.  There is no dispute about damage.  In fact, once the applicant and the clubs aligned with it failed to procure the setting aside of the Commitment Agreements and the Loyalty Agreements, no answer remained to the cross-claim for the intentional procurement of their breach.  Similarly there is no answer to the cross-claim related to intentional procurement of the breach of the contract between the League and its members and the contract constituted by the admission of each club to the competition for 1995.

     But in the cross-respondents' written submissions, an attempt is made to argue that there is a defence based on legal advice that News Limited had a strong case for the setting aside of the Commitment Agreements, which it should win.  This advice seems to have been based on the case brought under the Trade Practices Act in the application.  In support of the proposition that the receipt of such advice raises a defence, two cases were cited: Short v The City Bank of Sydney (1912) 15 CLR 148 at 160; and British Industrial Plastics, Ltd v Ferguson [1940] 1 All ER 479.  But these cases are not authority for the defence raised.  In the former case, Isaacs J. pointed to the necessity for proof of intention, and commented:

    "But to constitute that cause of action, the defendant must have induced or procured the doing of what he knew would be a breach of contract.  A bonâ fide belief reasonably entertained that it was not a breach of contract would be fatal to the claim.  If the defendant did not know of the existence of the contract, he could not induce its breach; if he reasonably believed it did not require a certain act
to be performed, his inducing a party to the contract to do something inconsistent with it could not be regarded as an inducement or procurement knowingly to break the contract; if he believed on reasonable grounds that the contract had been rescinded, or performance waived, when in fact it had not, he could not be said to knowingly procure its breach."

The latter case is of exactly the kind that Isaacs J. contemplated.  The defendant, though he acted foolishly, honestly convinced himself that the action he was inducing had nothing to do with any contract with the plaintiff.  The present case is entirely different.  Knowing of the contractual rights of the cross-claimants, the cross-respondents deliberately induced breaches, and now say they were advised that they "should" be able to have the contracts set aside under the Trade Practices Act.  But they had not been set aside, and the cross-respondents knew it.  They gambled on the correctness of their advice, and did so in circumstances where, even if the advice was correct, there was no certainty that it would lead to a setting aside of the contracts back dated to a time before their breach.  That is quite different from a situation of ignorance of the existence of rights unknowingly set at naught.

     There is in fact an authority which is in point.  That authority is Building Workers' Industrial Union of Australia v Odco Pty Ltd (supra).  There, at 141 et seq. the Full Court in its joint judgment dealt with a defence that the agreement, breach of which had been intentionally induced, "was unlawful, or attended by unlawful conduct" so as to justify the interference.  The agreement having been held not unlawful, it was submitted to the Full Court "that a bona fide and reasonable belief would in each case be sufficient to justify the proved interference with contractual relations, even if the belief turned out to be wrong."  This defence the court found (at 146) to be "impossible" to sustain.  It pointed out (and the same, of course, is true here) that the question of the validity of the contract "was quite susceptible of determination by other means involving no unlawfulness".  Indeed, not only did the defence of a bona fide belief fail, but the court left open (at 146) the question whether, even had the contract involved illegality, this could have justified an intentional interference with the contractual relations that actually subsisted pursuant to it.  That, of course, is a point that could have arisen here had a contravention of the Trade Practices Act been established.  Belief that a contract, of which the breach is procured, is unenforceable is also stated not to be a defence in Clerk & Lindsell on Torts, 16th ed. (1989) at 795.

     These cross-claims succeed.

EQUITABLE RIGHTS TO PROPERTY, TRADE MARKS AND FIDUCIARY DUTIES

     I have earlier referred to the joint nature of the activities of the clubs and the League in the sporting association which commenced in Australia under the name Rugby League, and to a number of United States authorities which have emphasized the interdependence characteristic of a sporting league.  Counsel for the cross-claimants submit that what was established was a joint venture, and that fiduciary relationships were involved.  The relevant law was discussed in United Dominions Corporation Limited v Brian Proprietary Limited (1985) 157 CLR 1.  Gibbs C.J. said (at 7-8):

    "Although it is not easy to attempt to define the circumstances in which a fiduciary relationship will be found to exist (see the discussion in Hospital Products Ltd. v. United States Surgical Corporation (1984) 156 C.L.R., at p. 67 ff.) there was, in the circumstances of the present case, a relationship between U.D.C. and Brian based on the same mutual trust and confidence, and requiring the same good faith and fairness, as if a formal partnership deed had been executed."

In their joint judgment Mason, Brennan and Deane JJ. said (at 10-11):

    "The term `joint venture' is not a technical one with a settled common law meaning.  As a matter of ordinary language, it connotes an association of persons for the purposes of a particular trading, commercial, mining or other financial undertaking or endeavour with a view to mutual profit, with each participant usually (but not necessarily) contributing money, property or skill.  Such a joint venture (or, under Scots' law, `adventure') will often be a partnership.  The term is, however, apposite to refer to a joint undertaking or activity carried out through a medium other than a partnership: such as a company, a trust, an agency or joint ownership.  The borderline between what can properly be described as a `joint venture' and what should more properly be seen as no more than a simple contractual relationship may on occasion be blurred.  Thus, where one party contributes only money or other property, it may sometimes be difficult to determine whether a relationship is a joint venture in which both parties are entitled to a share of profits or a simple contract of loan or a lease under which the interest or rent payable to the party providing the money or property is determined by reference to the profits made by the
other.  One would need a more confined and precise notion of what constitutes a `joint venture' than that which the term bears as a matter of ordinary language before it could be said by way of general proposition that the relationship between joint venturers is necessarily a fiduciary one: but cf. per Cardozo C.J., Meinhard v. Salmon (1928) 249 N.Y. 458, at p. 462; 164 N.E. 545, at p. 546.  The most that can be said is that whether or not the relationship between joint venturers is fiduciary will depend upon the form which the particular joint venture takes and upon the content of the obligations which the parties to it have undertaken.  If the joint venture takes the form of a partnership, the fact that it is confined to one joint undertaking as distinct from being a continuing relationship will not prevent the relationship between the joint venturers from being a fiduciary one.  In such a case, the joint venturers will be under fiduciary duties to one another, including fiduciary duties in relation to property the subject of the joint venture, which are the ordinary incidents of the partnership relationship, though those fiduciary duties will be moulded to the character of the particular relationship: see, generally, Birtchnell v. Equity Trustees, Executors & Agency Co. Ltd. (1929) 42 C.L.R. 384, at pp. 407-409."

Dawson J. said (at 15-16):

          "Perhaps in this country, the important distinction between a partnership and a joint venture is, for practical purposes, the distinction between an association of persons who engage in a common undertaking for profit and an association of those who do so in order to generate a product to be shared among the participants.  Enterprises of the latter kind are common enough in the exploration for and exploitation of mineral resources and the feature which is most likely to distinguish them from partnerships is the sharing of product rather than profit.  It is, however, unnecessary to pursue that matter here.

          Although the relationship between participants in a joint venture which is not a partnership will be governed by the particular contract rather than extrinsic principles of law, the relationship may nevertheless be a fiduciary one if the necessary confidence is reposed by the participants in one another.  Of course, in a partnership the parties
are agents for each other and this may constitute a separate reason for the fiduciary character of a partnership.  There may be no such agency between participants in a joint venture but, as Dixon J. pointed out in Birtchnell v. Equity Trustees, Executors & Agency Co. Ltd. (1929) 42 C.L.R. 384, at pp. 407-408, even in a partnership it is really the mutual confidence between partners which imposes fiduciary duties upon them and the same confidence may, in appropriate circumstances, be found to exist between participants in a joint venture."

     It seems to me that mutual trust and confidence, in pursuit of jointly held objectives in order to generate a product to be shared among the participants, each of whom will have contributed, is a description of the situation of the League and the clubs which matches what their Honours said in United Dominions Corporation Limited v Brian Pty Limited.  The clubs were indeed constituted with a view to their playing in the competition controlled by the League.  Most of them reposed in it the power of ultimate control over the form of their own memoranda and articles of association, and it admitted them, by their representatives, to become its members with a predominant voting power within the League.  Mutual trust could scarcely go further.  Their interdependence, from the point of view of their sporting enterprise, has been sufficiently emphasized in passages I have quoted from some of the United States cases.  It includes, in the case of the League, the equal sharing among the clubs of substantial amounts distributed by the League, and the arrangements with respect to merchandising which involve both the clubs and the League.  The mutuality of the enterprise was evidenced by a number of witnesses, whose evidence I accept, who spoke of the assistance rendered by one club to another when problems were encountered, and of course there were grants and other forms of assistance given by the League to clubs.  The very admission of new clubs was a great form of assistance to the promotion of rugby league in their areas, as they were admitted without any payment for the accumulated benefit of the prestige, goodwill and substantial assets involved in the competition.  Trade marks relating to individual clubs were held by the League under arrangements that were never formalised, the very lack of formality of which indicated the mutual trust involved.

     Mutual reliance also extends to a wide range of activities that are fundamental to the continuance of rugby league.  Each of the League and the various individual clubs is responsible, in various ways, for the promotion of the game among the young and the development and maintenance of junior competitions.  Activities of joint concern include the revision of rules, the scheduling of competitions, the appointment and training of referees, the system of control over player infractions of the rules, and the arrangements for interstate and international competition.

     The cross-respondents contended that the dropping out of certain clubs over the years, the addition of others, and the addition of Australian Rugby Football League Limited somehow told against the existence of a joint enterprise.  I see nothing inconsistent with the existence of a joint enterprise in these features.  Changes are inevitable.  Partnerships also have partners retire and new partners join them.  It does not matter, for present purposes, whether or not one analyses the situation when such a reconstitution occurs as involving an end to one association and the commencement of another, or whether one understands the concept of a joint enterprise as sufficiently flexible to permit it to be seen as one enterprise with a fluctuating membership.  Either way, at any given time there is a joint venture in existence.  In this case, the control over the continuance of clubs committed to the League clearly shows the trust that was involved. 

     I accept the submission of counsel for the cross-claimants that where property committed to a joint venture is vested in the name of a particular participant, rather than in the joint names of all, that participant holds the joint venture asset on trust for all of the joint venturers: see Chan v Zacharia (1984) 154 CLR 178 at 180-181.  In the present case, clubs had rights in respect of grounds, goodwill intimately associated with the competition controlled by the League, and contractual rights conferred by their long term contracts with players.  In Muschinski v Dodds (1985) 160 CLR 583 at 619-620, Deane J. (with whom Mason J. agreed) identified a "general principle of equity" which "operates upon legal entitlement to prevent a person from asserting or exercising a legal right in circumstances where the particular assertion or exercise of it would constitute unconscionable conduct".  He went on to say:

    "Those circumstances can be more precisely defined by saying that the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it.  The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do: cf. Atwood v. Maude (1868) L.R. 3 Ch. App., at pp. 374-375, and per Jessel M.R., Lyon v Tweddell (1881) 17 Ch. D. 529, at p. 531."

In Baumgartner v Baumgartner (1987) 164 CLR 137 at 148, this passage was cited in the joint judgment of Mason C.J., Wilson and Deane JJ., who added:

    "His Honour pointed out that the constructive trust serves as a remedy which equity imposes regardless of actual or presumed agreement or intention `to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle'".

     In my opinion, these passages are applicable to the attempt by clubs aligned with News Limited to retain for their own benefit, or pass over to a Superleague company, assets placed under their control, or acquired by them, for the purposes of the joint venture organized by the League and utilizing the material resources, expertise, goodwill and assets generally made available to them by virtue of their participation in it.  If that venture did not cease to include these clubs "without attributable blame", in the sense in which Deane J. uses that expression, it certainly ceased without blame attributable to the League which had been appointed the controlling authority within the venture and was acknowledged as such right up to the moment of the clubs' defection. 

     The cross-respondent clubs were guilty of breaches of their fiduciary obligations in many respects, when they joined with Superleague in dismantling their own operations as members of the League, and set about deliberately arranging the effective transfer of assets held for the joint venture to the new corporate venture controlled by Superleague.  They were not merely leaving one competition to join another, but hastily, and with high-handed disregard of the rights of the League and of other clubs, transferring all the joint assets that were within their control to the Superleague companies.  They were facilitating what was frankly acknowledged to be an attempt to substitute the Superleague competition for the joint venture's competition, thus in effect taking it over.

     Third parties, such as News Limited and the Superleague companies, can be liable for a breach of fiduciary obligation by a club, upon ordinary principles, in several ways.  If property the subject of a trust is transferred to such a third party and remains identifiable, it may be recovered unless the legal property in it was obtained for value and without notice.  If the property is no longer able to be traced, a liability as a constructive trustee to make good any loss may be enforced.  Even without receiving trust property, a third party who knowingly participated in a dishonest and fraudulent design on the part of a fiduciary may be found liable.  But in Royal Brunei Airlines SDN. BHD. v Philip Tan Kok Ming [1995] 3 WLR 64, the Privy Council held that where a third party dishonestly assisted a trustee to commit a breach of trust or procured him to do so, the third party would be liable to the beneficiary for the loss so occasioned, not only where the trustee had been dishonest or fraudulent, but on the basis of his own dishonesty.  Lord Nicholls of Birkenhead said (at 73):

    "Whatever may be the position in some criminal or other contexts (see, for instance, Reg. v. Ghosh [1982] Q.B. 1053), in the context of the accessory liability principle acting dishonestly, or with a lack of probity, which is synonymous, means simply not acting as an honest person would in the circumstances.  This is an objective standard.  At first sight this may seem surprising.  Honesty has a connotation of subjectivity, as distinct from the objectivity of negligence.  Honesty, indeed, does have a strong subjective element in that it is a description of a type of conduct assessed in the light of what a person actually knew at the time, as distinct from what a reasonable person would have known or appreciated.  Further, honesty and its counterpart dishonesty are mostly concerned with advertent conduct, not inadvertent conduct.  Carelessness is not dishonesty.  Thus for the most part dishonesty is to be equated with conscious impropriety.  However, these subjective characteristics of honesty do not mean that individuals are free to set their own standards of honesty in particular circumstances.  The standard of what constitutes honest conduct is not subjective.  Honesty is not an optional scale, with higher or lower values according to the moral standards of each individual.  If a person knowingly appropriates another's property, he will not escape a finding of dishonesty simply because he sees nothing wrong in such behaviour.

     In most situations there is little difficulty in identifying how an honest person would behave.  Honest people do not intentionally deceive others to
their detriment.  Honest people do not knowingly take others' property.  Unless there is a very good and compelling reason, an honest person does not participate in a transaction if he knows it involves a misapplication of trust assets to the detriment of the beneficiaries.  Nor does an honest person in such a case deliberately close his eyes and ears, or deliberately not ask questions, lest he learn something he would rather not know, and then proceed regardless."

Cf. R v Byrnes (1995) 130 ALR 529 at 537-538.

     According to these tests, the evidence makes it plain that News Limited and the Superleague companies acted, in the relevant sense, with dishonesty.  They knew the circumstances out of which the relevant legal conclusions arise; and the extraordinary steps taken, culminating in comprehensive indemnities, provide powerful evidence from which full knowledge may be inferred.  The failure of Messrs Cowley and Smith to give evidence again enables the inferences to be drawn the more confidently.  Where Mr Ribot's knowledge is relevant, his position and experience in association with the League and more than one club makes the position plain.  It is worth recalling that the indemnity given to the Penrith club specifically refers to liability under any joint venture arrangement.  Bearing in mind the detailed investigations and the meticulous planning undertaken by News Limited, to which I have previously referred, the Court would be shutting its eyes to the obvious if it did not conclude that News Limited and those involved on its behalf, and in association with it, were well aware of all the aspects of the situation which created fiduciary obligations.  If anything more were needed, the extreme secrecy preserved even after the plan had been put into execution, and during its execution, extending to unusual confidentiality clauses and the encouragement of players to dissemble their involvement, suggest an awareness that injunctive relief might have stopped everything in its tracks had the true position been made known in time.  Among many indications of the knowledge of those involved is the presentation Mr Smith made in February to the League, recognizing as it did the organic unity of the League and the clubs, and the heritage they had received from their past joint activities. 

     A particular issue arises in respect of trade marks which are registered in the name of the League.  On the evidence, it seems clear that, some years ago, there was a proposal to document the position of the trade marks, stating expressly the rights which were proposed to be apportioned between the parties, that is, the League and the clubs.  For some reason, the proposal simply lay fallow and was not carried to completion.  But the trade marks were put in the name of the League, and it is quite apparent that over a period of years the clubs acquiesced, with knowledge, in a system involving the control of the trade marks by the League.  Indeed, the clubs participated in this system.  The marks were of course brought into existence, in the first place, for purposes associated with the participation of the clubs in the competition organized by the League - in other words, as part of the joint venture.  In my opinion, the proper inference is that there was a tacit agreement by which the League held the trade marks in trust for itself and all the clubs participating in the competition from time to time, and on the basis that the League would have a power of control over their use.  In the special circumstances in which the clubs aligned with News Limited left the competition, it would not be unconscionable, within the meaning of the principle stated by Deane J. in Muschinski v Dodds, for the League to retain the trade marks. 

     A number of other issues were raised in relation to the trade marks which I have not dealt with at this stage, and will reserve until the presentation of short minutes of orders.

     I certify that this and the preceding two hundred and eighteen (218) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Burchett.

     Associate:

     Date: 23 February 1996

     Counsel for the Applicant in the main proceedings (NG 197 of 1995) and for the First to Thirtieth Cross-Respondents to the First Cross-Claim:

          Mr R.V. Gyles Q.C. with Mr P.G. Hely Q.C., Mr J.D. Heydon Q.C., Mr C.P. Comans, Mr I.M. Jackman, Mrs J.E. Stuckey-Clarke, Mr T.D. Castle and Mr R. Cobden           

          Instructed by: Atanaskovic Hartnell

     Counsel for the First and Second Respondents in the main proceedings (NG 197 of 1995) and for the First and Second Cross-Claimants in the First Cross-Claim:

          Mr R.J. Ellicott Q.C. with Mr D.K. Catterns Q.C., Mr D.M. Yates, Mr A.J.L. Bannon, Mr R.J. Weber,

          and Mr D.B. Studdy

          Instructed by: Gilbert & Tobin as agents for Colin W Love & Co.

     Counsel for the Seventh and Ninth to Nineteenth Respondents in the main proceedings (NG 197 of 1995), who are also Cross-Claimants in the Second Cross-Claim:

          Mr J.J. Spigelman Q.C. with Mr A.J. Payne

          Instructed by: Gilbert & Tobin

     Dates of hearing:  25-29 September, 3, 10-13, 16‑20, 27, 30, 31 October, 1‑3, 6-10, 13-17, 20-24, 27-30 November, 1, 4-8 and 11-15 December 1995

     Date of judgment:  23 February 1996