FEDERAL COURT OF AUSTRALIA

Francis v South Sydney District Rugby League Football Club Ltd

[2002] FCA 1306

AGENCY – professional Rugby League Football player, injured in a match – claims that his coach promised him a contract with club for following year if he would defer question of surgery until end of current season, and resume playing after three weeks, rather than having immediate surgery and be off field for virtually whole of remainder of current season – player defers surgery and resumes playing after three weeks – club subsequently makes plain to player and his manager that club will not be exercising its option to renew his contract for following year’s season – towards end of season, player ceases playing and has surgery – club does not wish to retain player for following year – player cannot obtain engagement by any other club – player claims inadequate time had remained available for him to become marketable for following year – his being out of competition that year signifies no club interested in him for subsequent years – claim against club for damages for loss of career as professional football player – actual and ostensible authority of coach to engage player on behalf of club – power of coach to render club liable for breach of contract, breach of fiduciary duty, negligence, misleading or deceptive conduct – state of mind of player and his manager as to coach’s authority to commit club – attribution of manager’s knowledge of coach’s lack of authority to his client-player.

CONTRACT – consideration – promise to perform existing contractual duty owed by promisee to promisor – whether good consideration for promisor’s promise.

CONTRACT – repudiation – whether innocent party obliged to elect to accept and to sue at once for damages.

CONTRACT – acceptance – whether conduct relied on as constituting acceptance of offer accompanied by intention of accepting it.

ESTOPPEL – unreasonableness of reliance on representation.

FIDUCIARY DUTY – whether owed by football club to employed professional First Grade Rugby League player – whether fiduciary duty is owed by employers to employees generally in respect of making of statement when reliance on the statement would be unreasonable – whether statement by coach to player can put club in breach of fiduciary duty.

NEGLIGENCE – promise or assurance given by coach of football club to player that he will have a contract with club for following year’s football season – whether made in course of coach’s duties – whether club vicariously liable for its coach’s statement.

NEGLIGENCE – duty of care – whether duty of care arises in respect of making of statement when reliance on the statement would be unreasonable.

TRADE PRACTICES – whether football club’s conduct towards its employed professional Rugby League Football player was unconscionable – whether club’s coach’s conduct was to be attributed to club under subs 84(2) of the Trade Practices Act 1974 (Cth) – whether subs 84(2) a code – whether other principles of vicarious liability apply.

UNCONSCIONABLE CONDUCT – whether conduct of football club towards its employed professional First Grade Rugby League player was unconscionable – whether player suffered from a “special disability” or “special disadvantage” – meaning of “unconscionable”.

Evidence Act 1995 (Cth) s 59, s 60

Trade Practices Act 1974 (Cth) s 84(2), s 51AA, s 51AC

Fuller v Benett (1843) 2 Hare 394 (67 ER 162) followed

Vane v Vane (1872) LR 8 Ch App 383 followed

Taylor v Yorkshire Insurance Co Ltd [1913] 2 IR 1 followed

Ford Excavations Pty Ltd v Do Carmo [1981] 2 NSWLR 253 followed

Ex parte Delhasse; Re Megevand (1878) LR 7 Ch D 511 followed

Adam v Newbigging (1888) LR 13 App Cas 308 followed

R v Foster; Ex parte Commonwealth Life (Amalgamated) Assurances Ltd (1952) 85 CLR 138 followed

Garnac Grain Co Inc v HMF Faure & Fairclough Ltd [1968] AC 1130 followed

Colbron v St Bees Island Pty Ltd (1995) 56 FCR 303 followed

Jones v Dunkel (1959) 101 CLR 298 distinguished

Payne v Parker [1976] 1 NSWLR 191 (CA) followed

Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157 cited

Smith v Samuels (1976) 12 SASR 573 cited

Shum Yip Properties Development Ltd v Chatswood Investment and Development Co Pty Ltd (2002) 40 ACSR 619 cited

Fabre v Arenales (1992) 27 NSWLR 437 (CA) followed

Papakosmas v The Queen (1999) 196 CLR 297 followed

Powell v Lee (1908) 99 LT 284 followed

Gjergja v Cooper [1987] VR 167 followed

Loftus v Roberts (1902) 18 TLR 532 followed

Beattie v Fine [1925] VLR 363 followed

Stocks & Holdings (Constructors) Pty Ltd v Arrowsmith (1964) 112 CLR 646 followed

Elibank-Murray v Dunne (1982) NSW Conv R §55-048 followed

Mobil Oil Australia Ltd v Wellcome International Pty Ltd (1998) 81 FCR 475 cited

R v Clarke (1927) 40 CLR 227 followed

Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424 followed

Crabb v Arun District Council [1976] Ch 179 distinguished

Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 followed

Chin v Minister for Education of Western Australia [2000] WASC 304 cited

Securities and Exchange Commission v Chenery Corp 318 US 80 (1943) cited

Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165 cited

Hollingsworth v Commissioner of Police (1999) 47 NSWLR 151 distinguished

Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144 distinguished

Nottingham University v Fishel [2000] ICR 1462 followed

News Limited v Australian Rugby League Football Ltd (1996) 64 FCR 410 followed

Blomley v Ryan (1956) 99 CLR 362 cited

Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 cited

Louth v Diprose (1992) 175 CLR 621 cited

Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 185 ALR 1 cited

Australian Competition and Consumer Commission v Samton Holdings Pty Ltd (2002) 189 ALR 76 cited

Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 cited

Australian Competition and Consumer Commission v Simply No Knead (Franchising) Pty Ltd (2000) 104 FCR 253 cited

Monroe Topple & Associates Pty Ltd v The Institute of Chartered Accountants in Australia (2001) 23 ATPR (Digest) §46-212 cited

Cameron v Qantas Airways Ltd (1995) 55 FCR 147 cited

Hurley v McDonald’s Australia Ltd (2000) 22 ATPR §41-741 cited

Commonwealth v Verwayen (1990) 170 CLR 394 cited

Scott v Davis (2000) 204 CLR 333 cited

Hollis v Vabu Pty Ltd (2001) 207 CLR 21 cited

NMFM Property Pty Ltd v Citibank Ltd (2000) 107 FCR 270 cited

Mutual Life & Citizens’ Assurance Co Ltd v Evatt (1968) 122 CLR 556 (HC); (1970) 122 CLR 628 (PC) followed

L Shaddock & Associates Pty Ltd v The Council of the City of Parramatta (1981) 150 CLR 225 followed

San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 (1986) 162 CLR 340 followed

Norris v Sibberas [1990] VR 161 followed

White and Carter (Councils) Ltd v McGregor [1962] AC 413 cited

MICHAEL GARY FRANCIS v SOUTH SYDNEY DISTRICT RUGBY LEAGUE

FOOTBALL CLUB LIMITED (ACN 002 487 390)

N 1477 OF 1999

LINDGREN J

8 NOVEMBER 2002

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1477 OF 1999

BETWEEN:	MICHAEL GARY FRANCIS APPLICANT
AND:	SOUTH SYDNEY DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED (ACN 002 487 390) RESPONDENT
JUDGE:	LINDGREN J
DATE OF ORDER:	8 NOVEMBER 2002
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The application be dismissed.

2. The applicant pay the respondent’s costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1477 OF 1999

BETWEEN:

MICHAEL GARY FRANCIS

APPLICANT

AND:

SOUTH SYDNEY DISTRICT RUGBY LEAGUE

FOOTBALL CLUB LIMITED (ACN 002 487 390)

RESPONDENT

TABLE OF CONTENTS

par no.

INTroduction [1]–[4]

pleading [5]–[18]

facts in outline [19]–[93]

General [19]–[32]

Chronological account [33]–[93]

various written contractual arrangements [94]–[140]

1. Souths’ Retention Committee and Selection Committee [95]–[117]

General – actual and apparent authority to engage players [95]–[106]

Francis’s understanding [107]–[114]

Keenan’s understanding [115]–[117]

2. The CS Agreement between Souths and SMC [118]–[127]

3. The Agreement (between Francis and AMI) [128]–[131]

4. The 1996 Playing Contract [132]–[140]

certain aspects of the evidence [141]–[200]

1. Witnesses – credit [141]–[143]

2. Failure of either party to call Martin [144]–[158]

par no.

3. Martin’s alleged statement to Francis in their face to face
conversation on Monday 25 May 1998 [159]–[170]

4. Martin’s alleged statement to Keenan over the telephone on
Tuesday 26 May 1998 [171]–[175]

5. Martin’s alleged statement to Leisa Francis on or about

Tuesday 26 May 1998 [176]–[181]

6. Martin’s alleged statement to Francis on or about Saturday

30 May 1998 [182]

7. Keenan’s telephone conversation with Cookson on or about

22 June 1998 and Keenan’s letter following [183]–[193]

8. Telephone conversation between Keenan and Coleman in late

July 1998 (following Round 20) [194]–[200]

causes of action [201]–[325]

1.1 Breach of implied contractual duty of Souths to act reasonably

and in good faith towards Francis when requiring or selecting

Francis to play, or giving him orders relating to training or playing [202]–[230]

1.2 Breach of contract made in or about May to July 1998 that Souths

would re-sign Francis for the 1999 season on the terms contained

in the option provision in the 1996 Playing Contract or on such

other terms as Francis was prepared to agree to [231]–[259]

2. Breach of fiduciary duty [260]–[272]

3. Contravention of the TP Act [273]–[291]

4. Unconscionable conduct and estoppel [292]–[310]

5. Negligence [311]–[325]

loss or damage [326]–[343]

conclusion [344]

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1477 OF 1999

BETWEEN:

MICHAEL GARY FRANCIS

APPLICANT

AND:

SOUTH SYDNEY DISTRICT RUGBY LEAGUE

FOOTBALL CLUB LIMITED (ACN 002 487 390)

RESPONDENT

JUDGE:	LINDGREN J
DATE:	8 NOVEMBER 2002
PLACE:	SYDNEY

REASONS FOR JUDGMENT

INTroduction

1 The applicant (“Francis”) claims that the respondent (“Souths” and “the Club”) is liable to compensate him for the loss of his career as a professional First Grade Rugby League Football player. (Francis’s amended statement of claim refers to Rugby League as “the Game”, as I will sometimes do.)

2 When playing First Grade Rugby League for Souths in a match against the Newcastle Knights on Sunday 24 May 1998, Round 11 of the 1998 season, Francis suffered an injury to his left shoulder – a grade III acromio-clavicular (“AC”) joint dislocation (“grade III” indicates the most severe kind). If he were to have had immediate surgery he would, in effect, not have been able to resume playing for nearly the whole of the remainder of the 1998 season, but would have been fit for both pre-season training and the football season itself in 1999. An alternative possibility was to resume playing after only three weeks off the field and to play out the 1998 season with the benefit of physiotherapy, a training régime specially designed for him and the use of painkilling injections, as necessary. A third possibility, which was referred to in the evidence but which did not play a significant part in the case, was simply to rest for eight weeks before playing again.

3 Francis claims that Souths promised him a contract for the 1999 season if he deferred surgery and followed the second course mentioned. In fact, he did not play in Round 12 (29–31 May 1998), Round 13 (6/7 June 1998) or Round 14 (12–14 June 1998) but resumed playing in Round 15 (20/21 June 1998) and played through to Round 21 (31 July–2 August 1998). He says that following Round 21 he decided he could not continue because of the pain he was experiencing and because his loss of strength and bulk made him less effective as a player and more vulnerable to injury. At that time only three matches (Rounds 22, 23 and 24) remained to be played, since Souths had not reached the finals which were to occupy five weeks following Round 24.

4 After ceasing to play, Francis underwent surgery on 11 September 1998. He claims that it was not until 7 November 1998 that he learned for certain that Souths did not wish to retain him for 1999. He claims he attempted to find another club which would give him a contract but was unsuccessful because there remained insufficient time available for him to recover from his operation and to build up his bulk and strength adequately for the 1999 season. According to Francis’s claim, his absence from the competition in 1999 meant that he had no recent “track record” on which a club could be expected to engage him for 2000 or subsequent years.

pleading

5 By his amended statement of claim (“the Pleading”), Francis pleads breach of contract, breach of fiduciary duty, misleading and deceptive conduct, “unconscionable conduct and estoppel” and negligence. Notwithstanding the mode of expression in [8] to [18] below, my account there of the Pleading does not include any finding of fact.

6 It is part of the background that Francis had a written contract dated 14 August 1996 with Souths (“the 1996 Playing Contract”) which was for a period commencing on that date and ending on 31 October 1998. This contract covered the 1997 and 1998 seasons. It stipulated for 1997 a “playing fee” (sometimes called a “sign-on fee”) of $80,000 and a “match fee” of $2,000 for every First Grade game in which Francis participated “either as a member of the starting line up or as a fresh Reserve”. Since Francis played thirteen such games in 1997, he earned $106,000 in that year. For the 1998 season, the 1996 Playing Contract provided for a playing fee equal to the total of $80,000 and the total amount of the match fees which had been paid to Francis in 1997 ($26,000) – a total playing fee of $106,000. In addition, it provided that Francis was to receive a match fee of $1,000 for every First Grade game in which he participated in 1998, either as a member of the starting line up or as a fresh Reserve. By the end of the 1998 season he had played twelve such games and therefore had earned match fees totalling $12,000, which, with the playing fee of $106,000, made a total of $118,000 earned in 1998.

7 The 1996 Playing Contract gave Souths an option to retain Francis for the 1999 season on the basis of a sign on fee of $150,000 plus a match fee of $1,500 for every First Grade game in which he participated in that season, either as a member of the starting line up or as a fresh Reserve. The option was exercisable by the Club’s informing Francis, in writing, of its exercise by 31 August 1998. Accordingly, Francis’s playing performance in 1998 down to 31 August was of obvious significance both for him and for Souths, because of its relevance to Souths’ decision as to whether to exercise its option.

8 There are two breach of contract cases: first, breach of implied terms of the 1996 Playing Contract, and, secondly, breach of an alleged “Contract for the 1999 Season”. As to the former, it was implied by cll 3(a), 3(d) and 10(3)(f) of the 1996 Playing Contract (set out at [134] below) and by law that Souths “would, and was under a duty to, act reasonably and in good faith towards” Francis whenever it required or selected him to play and whenever it gave him orders relating to training for, and the playing of, the Game (3). (Numerals in bold are references to paragraphs of the Pleading.) Unreasonably and in bad faith, Souths selected and ordered Francis to play after 24 May 1998 until he ceased playing after Round 21 of the 1998 season, knowing that he had dislocated his left AC joint on that date. Particulars of Souths’ alleged unreasonableness and bad faith are:

that Souths failed to have regard to a recommendation made on or about 25 May 1998, the day after Francis’s injury, by Dr Nathan Gibbs, that Francis have immediate AC joint reconstruction;
that Souths failed to have regard to Francis’s state of health in determining his obligation to play to the best of his ability or at all; and
that Souths threatened and represented to Francis that it would re-sign him for 1999 only if he continued to play, and deferred his AC joint reconstruction until after the 1998 season. (4)

9 The second breach of contract case is that “in or about May to July 1998” the parties entered into a further agreement by which Souths promised to re-sign Francis for 1999 on the terms of the option in the 1996 Playing Contract or “such other terms as [Francis] was prepared to agree to”, if Francis deferred having an operation on his dislocated AC joint and continued playing in the 1998 season “for as long as he could”. The Contract for the 1999 Season was express or partly express and partly implied:

(a) In so far as the Contract for the 1999 Season was express, it was made orally on or about Monday 25 May 1998 between Francis and Steve Martin (“Martin”) who was Souths’ “Head Coach” and the coach of Souths’ First Grade team.

(b) In so far as the Contract for the 1999 Season was implied, the implication arose from the following circumstances:

(i) that Souths’ new First Grade coach who replaced Martin, Craig Coleman (“Coleman”), in or about June 1998, knowingly allowed Francis to play during the 1998 season while injured;

(ii) that Souths failed to correct a letter written by Francis’s Manager, Greg Keenan (“Keenan”), to Souths’ Operations Manager, Frank Cookson (“Cookson”), on 26 June 1998, in which Keenan confirmed his understanding that Souths was willing to re-sign Francis for 1999 “for a lesser sign on fee than provided under the option clause in the 1996 Playing Contract”;

(iii) that the implication was necessary to give business efficacy to Souths’ promise to re-sign Francis for 1999 in circumstances in which the implied term was “so obvious that it [went] without saying”; and

(iv) that Coleman made an oral statement to Keenan at about the end of July 1998 that Keenan should tell Francis not to worry and that while Coleman was at Souths, Francis would be at Souths too. (6)

10 Pursuant to the Contract for the 1999 Season, Francis deferred having his operation until after the 1998 season and kept playing for Souths in that season for as long as he could, which was until about the end of July 1998, when pain prevented him from continuing. (7) In breach of the Contract for the 1999 Season, Souths “refused and failed to exercise [its] option and to contract with [Francis] on any basis for [1999]”. (8)

11 The alleged fiduciary duty is based on the terms of the 1996 Playing Contract and the relationship between Souths and Francis. By cl 1 of that contract, that relationship was characterised as that of employer and employee.(9) By cl 26, Francis was not to enter into any discussion, negotiation, contract, agreement, arrangement, understanding or option to play the Game for any other club for the term of the 1996 Playing Contract, that is, from 14 August 1996 to 31 October 1998.(10) “In the circumstances, and by reason of the relationship between [Francis and Souths]”, Souths owed Francis a fiduciary duty (a) not to use its powers or discretions or both under the 1996 Playing Contract to gain an advantage for itself to the detriment of Francis, and (b) to act reasonably and in good faith towards him.(11) Souths breached its fiduciary duty by using its power and/or discretion under the 1996 Playing Contract to gain an advantage for itself to Francis’s detriment, and acted unreasonably and in bad faith towards Francis. As particulars of the breach, the Pleading first repeats the particulars of unreasonableness and bad faith given at [8] above in relation to the first breach of contract case. Secondly, it states as particulars that by requiring Francis to continue to play with his injury in 1998, Souths gained an advantage in disregard of Francis’s interests and to his detriment, in that, because Francis did not have surgery until after the 1998 season, Souths was able to gain his services during that season while his performance and reputation were diminished, with the result that he was prevented from being available to play in the pre–1999 playing season and therefore from entering into a playing contract for the 1999 season with Souths or with any other club. (12)

12 The claim of misleading and deceptive conduct is based on three representations (collectively and individually, “the Representations”). The first two Representations were made by Souths “in or about May 1998”. The first was that Souths would re-sign Francis for 1999 only if he continued to play the Game in the 1998 season with his injury and deferred surgery until after that season. (In substance this was a representation that if Francis did not do as mentioned, Souths would not re-sign him for 1999 and I will refer to it as “the negative Representation”.) The second was that if Francis continued to play the Game in the 1998 season with his injury and deferred surgery until after that season, Souths would re-sign him for 1999. (This was in positive terms and I will refer to it as “the positive Representation”.) The first two of the three Representations were express, or partly express and partly implied. In so far as they were express, they were made orally by coach Martin on or about 25 May 1998 to Francis and, separately, to Keenan. In so far as they were implied, they were implied:

by Souths’ new First Grade coach, Coleman, in or about June 1998, knowingly allowing Francis to play during the 1998 season while injured;
by Souths’ not correcting the letter from Keenan dated 26 June 1998 referred to in [9] above;
by the oral statement by Coleman to Keenan at about the end of July 1998 mentioned in [9] above; and
by an oral statement by Cookson to Keenan on 22 June 1998 to the effect that Souths was not exercising its option over Francis for 1999 but would be prepared to discuss a lesser figure for that season. (13)

13 The third Representation is distinct from the first two. It was made by Souths in or about July 1998 when Coleman represented to Francis, through his manager and agent Keenan, that Francis should not be worried about a contract with Souths for 1999 and that while Coleman was with Souths, Francis would be with Souths. (13A) (It will be noted that Coleman’s alleged statement to Keenan at about the end of July 1998 is also a circumstance from which the first two Representations are said to have arisen.)

14 Induced by the Representations, Francis continued to play in the 1998 season, carrying his injury, and he deferred surgery until, substantially, the end of that season.(14) The Representations were “false and misleading”, in that:

Souths did not re-sign Francis for 1999;
there were no reasonable grounds for the making of the Representations;
Souths failed to advise Francis that it had no obligation to re-sign him for 1999;
Souths failed to advise Francis that it might not re-sign him for 1999;
Souths failed to advise Francis that its option to re-sign him was not conditional upon his playing the Game in circumstances in which he had a dislocated AC joint;
Souths failed to advise Francis that omitting to have surgery until after the 1998 season might preclude him from being available to play in the pre-1999 playing season, and so, from entering into a playing contract for 1999 with Souths or with any other club; and
Francis should have been worried, and been advised by Souths to be worried, about the possibility of his not receiving a contract with Souths for the 1999 season. (15)

15 In the circumstances, Souths, in trade or commerce, engaged in misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) (“the TP Act”) and s 42 of the Fair Trading Act 1987 (NSW)(“the FT Act”). Francis also relies on s 51A of the TP Act and s 41 of the FT Act. Finally, in making the Representations, Souths engaged in conduct which was, in relation to employment that was or might be offered by it, liable to mislead Francis as a person seeking employment by Souths after the 1998 season, as to the availability, nature, terms, conditions or other matters relating to that employment, and was therefore in contravention of s 53B of the TP Act. (16)

16 The pleading of unconscionable conduct and estoppel commences by asserting that Francis expected that a legal relationship would exist between him and Souths pursuant to his being re-signed to play for Souths in 1999 on the terms of the option provision in the 1996 Playing Contract or such other terms as he was prepared to agree to, and that Souths would not be free to withdraw from that legal relationship.(17) Souths induced Francis to have that expectation by making the Representations.(18) Francis acted in reliance on the expectation engendered by Souths by continuing to play for Souths during the 1998 season while injured and deferring his AC joint reconstruction,(19) as Souths knew and intended him to do.(20) Francis’s doing so would occasion detriment to him if the expectation was not fulfilled,(21) yet Souths failed to act so as to avoid that detriment, by fulfilling the expectation or otherwise.(22) As a result, Souths is estopped from denying the existence of the Contract for the 1999 Season(23) or, in the alternative, engaged in conduct that is unconscionable within the meaning of the general law and contrary to s 51AA of the TP Act.(24) Further, or in the alternative, Souths in trade or commerce, in connection with the supply or possible supply of services to Francis, engaged in conduct that was unconscionable and contrary to s 51AB of the TP Act and s 43 of the FT Act or s 51AC of the TP Act.(25)

17 Finally, the claim in negligence commences with the contention that the Representations were made at a time when Souths knew or should have known that Francis was relying on Souths to exercise due care, skill and diligence in making the Representations; that Francis would or might act on the Representations; and that if he did so and they proved to be untrue or misleading or deceptive, he would or might suffer loss or damage.(26) By reason of the relationship between Francis and Souths and in the circumstances, Souths owed Francis a duty in making the Representations “to exercise all due care, skill and diligence”.(27) In breach of that duty, Souths failed to advise Francis:

(a) that there was no obligation on Souths under the 1996 Playing Contract to re-sign him for 1999;

(b) that it might not re-sign him for the 1999 playing season;

(d) that Souths’ option to re-sign him was not conditional on his playing in circumstances in which he had a dislocated AC joint;

(e) that deferring surgery until after the 1998 season might preclude him from being available to play in the pre-1999 playing season and so from entering into a playing contract for that season with Souths or with any other club; and, lastly,

(f) that he should have been worried about whether Souths would re-sign him for the 1999 season.(28)

18 As particulars of loss and damage, Francis asserts the loss of not being re-signed by Souths for 1999, quantified at $186,000, or, in the alternative, the loss associated with not being able to sign with another club because he underwent his AC joint reconstruction after the 1998 season, also quantified at $186,000. In addition, Francis gives as particulars, the loss of the opportunity to play for Souths or any other club participating in the 1999 “National Rugby League Premiership Competition” after the 1998 season, and the consequential loss of income over a playing life of six years, quantified at $186,000 per year ($1,116,000).(29) The sum of $186,000 is clearly arrived at by reference to the terms of the option in the 1996 Playing Contract – a sign-on fee of $150,000 plus match fees of $36,000 representing a match fee of $1,500 for each of 24 supposed matches.

facts in outline

General

19 Francis was born on 7 February 1974 and so was twenty-four years old in the 1998 football season. He played the Game in his school years. He played up to 1990 at De La Salle College, Lithgow. In 1991 and 1992, his last two years of high school, Francis attended, and played the Game at, St Gregory’s College, Campbelltown, where he received a football scholarship. He played in that College’s first 13, ultimately captaining that side in 1992, his final year at school. In 1992, Francis also played in the Australian Schoolboys Rugby League Football team, where he was a front-row forward and Vice Captain. He sat for the Higher School Certificate at the end of 1992.

20 Senior counsel for Francis relied, not only on his client’s strong sporting performance, but also on his weak academic performance. I will not dwell on the evidence of the latter. I accept, as Francis himself put it, that he was at school to play football rather than to study. I accept that his level of educational attainment was not high and that he is a slow reader.

21 It was Francis’s childhood dream to play the Game as a professional. In 1992, his last year at school, he decided he should employ a manager. On 24 July 1992 he entered into a three year written contract with All Sports Management Pty Ltd (“All Sports”), a company run by Wayne Beavis, which he engaged as his manager for three years to 24 July 1995. All Sports was required to advise Francis and to negotiate contracts for him to play the Game. All Sports negotiated Francis’s first contract with Souths which was a three year playing contract dated 23 October 1992. That contract covered the 1993, 1994 and 1995 seasons. In 1993, he played mainly in Souths’ Under 21 Years team, although he also played several Reserve and First Grade games. In 1994 he played in Souths’ Reserve Grade team and played several games in First Grade. In 1995, most of the games he played for Souths were in its First Grade team, where, again, his position was that of front-row forward.

22 In November 1995, Francis, then aged 21, retained solicitors to act for him in relation to his contractual arrangement with All Sports. Although his three year contract with All Sports had ended on 24 July 1995, he instructed his solicitors to write to All Sports so that it understood he was no longer bound to it.

23 Apparently without the assistance of any manager or lawyer, on 30 November 1995 Francis entered into a one year playing contract with Souths. This contract covered the period 1 November 1995 to 31 October 1996. It provided for a playing fee of $70,000. As well, in 1996, during the Australian off-season, he played for a short time for the London Broncos in England.

24 Francis entered into a Management Agreement (“the Agreement”) dated 1 July 1996 with AMI Rugby League Pty Ltd (“AMI”, which stands for “Athlete Management International”), a sports management company which was managed and directed by Keenan. For convenience, I will usually refer to Keenan rather than to AMI. The Agreement was for a period commencing on 1 July 1996 and ending on the expiry of the 1996 Playing Contract negotiated by Keenan, or on 1 July 1998, whichever should occur last. Since Keenan negotiated the 1996 Playing Contract which was to terminate on 31 October 1998, the Agreement was, in effect, for a period expiring on that date also. Under cl 4(c) of the Agreement, Keenan was to “negotiate terms acceptable to [Francis] in respect of all offers made to [Francis] by Employer Entities and ensure any contracts made [were] properly documented or recorded”.

25 The Agreement was negotiated between Francis and Keenan. Keenan gave Francis a draft to take away and consider. Until 27 May 1996, Keenan had been practising as a solicitor employed by Gadens Ridgeway. According to Keenan’s notes, Francis and Keenan had discussions on 31 May 1996, 11, 24 and 28 June 1996, and 1 July 1996. A note of Keenan’s dated 31 May 1996 records that “Greg Herder” was Francis’s solicitor, but Francis testified that Mr Herder was attending to his conveyancing work and did not advise him on the Agreement. Francis had a draft of the Agreement for some four days before telling Keenan he would sign it. However, Francis said he did not read the draft and trusted Keenan.

26 Keenan negotiated the 1996 Playing Contract with Souths. He commenced doing so immediately after Francis retained him on 1 July 1996. Keenan had a practice of making file notes of important events concerning his clients’ affairs whenever possible. The negotiation of the 1996 Playing Contract spanned the period from at least 8 July 1996 to 13 August 1996 when Keenan told Cookson that Francis accepted Souths’ offer. According to Keenan, the negotiation was a “true negotiation”. Initially, on 25 July 1996, Francis instructed Keenan to reject Souths’ offer of 16 July 1996 and to put a counter offer. On 3 August 1996, Francis, Keenan and Cookson met at the Charing Cross Hotel, where Cookson lived and worked. Keenan made a file note of the meeting. The file note suggested that the three men discussed various aspects of the proposed contract and that Francis tried to get more money, but Cookson stood firm, as Keenan had told Francis he was likely to do. On 14 August 1996 Francis signed the 1996 Playing Contract and Keenan signed as a witness to his signature. I accept that during the meeting on 3 August 1996 Francis took the initiative of seeking to extract more money from Cookson. Keenan’s file notes during the negotiations with Souths also show that Keenan was endeavouring to secure more lucrative terms for Francis from other clubs but that apparently none were available. (I will deal with the terms of the 1996 Playing Contract later.)

27 The above account of the part Francis played from 1992 to 1996 in negotiating and entering into contracts relating to professional Rugby League Football shows that he was not entirely a “babe in the woods” in his later dealings with Souths in 1998, with which the present case is concerned.

28 In the 1997 season, Francis played First Grade and Reserve Grade games for Souths. It was injury which caused him to play in Reserve Grade.

29 In the 1998 season, Francis commenced playing in Round 4 after recovering from an injury in a pre-season trial game. As noted earlier, he ceased playing following Round 21. Of the intervening eighteen rounds, he missed three rounds (12, 13 and 14) due to the injury with which this case is concerned. Of the fifteen rounds he played, twelve games were in First Grade and three were in Reserve Grade.

30 During the course of the hearing there were various assessments of Francis’s ability as a professional footballer in 1998. Wayne Pearce (“Pearce”), who was called by Francis to testify in this respect, was well qualified to do so. Pearce played 192 First Grade games for the Balmain Club from 1980 to 1990, fifteen representative games for New South Wales, and eighteen test matches for Australia; he was the coach of the First Grade Team of the Balmain Club from 1994 to 1999 and of the West Tigers from 1999 to 2000; and he coached the New South Wales State of Origin Team in 1999, 2000 and 2001. He said that in 1998 he considered Francis to be “a very tough, uncompromising, good football player, with a very high work rate on the field”. Sean Garlick (“Garlick”) was the Captain of Souths’ First Grade team in 1998 and 1999. He retired from professional football at the end of the 1999 season, having played 162 First Grade games. Souths called him as a witness. His affidavit included the following:

“I can describe Francis as an aggressive footballer who always would give his all in every game he played. However, while very aggressive, I would characterise him as having limited ball skills. As such, Francis had a restricted ability to promote second phase play and would therefore invariably be tackled with the ball.”

Scott Campbell was Head Trainer at Souths in 1998. He described Francis as “one of the first front-rowers picked for the First Grade side in the Club”. He testified that Francis was “very committed to fitness training” and that he “endeavoured to ensure that he was at peak fitness at all times”. Darryl Neville, who was appointed coach of Souths’ Reserve Grade team at the beginning of the 1998 season, described Francis as “a very tough, good first grade football player”.

31 Descriptions of Francis as a player by other witnesses with relevant knowledge and experience included “aggressive”, “go forward”, “workmanlike”, “solid”, “straight up and down”, “a good first-grade player”, “uncompromising”, “very tough”, “of a good character”, a player who relied on the physical side of his game rather than skill level, and a player who ran for the man rather than the gap.

32 My conclusion is that Francis was a generally well regarded front-row forward, but was not a player whom clubs felt they “must have” or whose engagement they should secure as a matter of high priority. In addition, it was common knowledge in 1998 that the Rugby League competition in 1999 was to have a reduced number of participating teams, with the result that there would be a surplus of players seeking engagements. Keenan conceded that as early as 27 May 1998 he had formed the opinion that it was unlikely that Souths would exercise its option over Francis, because of the reduction in market prices due to the forthcoming change just mentioned. When Francis was told on 22 June 1998 that Souths was not interested in exercising its option over him for 1999, his response was to tell Keenan that he had thought that might happen, adding that the reduced number of teams for 1999 would give rise to a glut of players. I will return to the subject of Francis’s prospects later when dealing with the issue of loss or damage.

Chronological account

33 I will now outline in chronological order the major events of 1998 (the numbers in brackets in the left-hand column are the numbers of the rounds in the 1998 season):

(1) 13–15 March ) Francis did not play because he was recovering from

(2) 20–22 March ) the pre-season trial game mentioned above

(3) 27–29 March )

(4) 3–5 April )

(5) 10–12 April ) Francis played Reserve Grade

(6) 17–19 April )

(7) 25/26 April )

(8) 1–3 May ) Francis played First Grade

(9) 8–10 May )

(10) 15–17 May )

(11) 23/24 May While playing in the First Grade match between Souths

and the Newcastle Knights, Francis sustained the injury

in question to his left shoulder. Dr Andrew McDonald, Souths’ Medical Officer, was present. He told Francis that the injury appeared to be a grade III left joint dislocation and that he would need to see him first thing the following morning, when the shoulder would have to be X-rayed. In the meanwhile, Francis’s left shoulder was placed in a sling and Dr McDonald prescribed analgesic medications.

Monday 25 May 1998

34 On this day, Francis attended upon Dr McDonald at the South Sydney Sports Medicine Centre, where he practised. Dr McDonald arranged for Francis’s shoulder to be X-rayed. There are differences between Francis’s and Dr McDonald’s versions of their conversation. It is common ground that Dr McDonald recommended “conservative”, in the sense of “non-surgical”, treatment which would see Francis back on the field within a few weeks, and that Francis resisted this suggestion in favour of immediate surgery. Dr McDonald told Francis he would refer him to see Dr Daniel Biggs, orthopaedic specialist, the next day for a second opinion. In the letter of referral, Dr McDonald informed Dr Biggs:

“He wants surgery for cosmetic reasons. I have explained that as a rule he could return to sport earlier with conservative [treatment] and have the surgery at the end of the year”.

35 On his regular “Monday injury list” addressed to Martin, Dr McDonald recorded in respect of Francis “grade III injury left A.C. joint. Seeing surgeon tomorrow. Out at least 2-3 weeks”.

36 After leaving Dr McDonald, Francis encountered Dr Gibbs, who also practised in the South Sydney Sports Medicine Centre, and from whom Francis had obtained “second opinions” in the past. He consulted Dr Gibbs, telling him he wanted surgery to improve his shoulder cosmetically and that he was to see Dr Biggs. Dr Gibbs inspected X-rays of Francis’s left shoulder and advised Francis of the “pros and cons” of immediate surgery as against playing on with the aid of painkillers. Francis told Dr Gibbs he wanted to have immediate surgery, and Dr Gibbs arranged for Dr Des Bokor, an orthopaedic surgeon, to perform the operation.

37 Francis claims that he had a critical conversation with Souths’ Head Coach and First Grade coach Martin, in the presence of assistant First Grade coach Coleman, in which Martin promised Francis a contract for the 1999 season if he resumed playing after three weeks and deferred his operation until after the end of the season. Martin was not called by either party. Francis and Coleman differ as to what Martin said to Francis and as to where the conversation took place. Francis says it took place in the cafeteria at Souths Leagues Club; Coleman says it took place outside the dressing sheds at Redfern Oval where Souths trained. Coleman said he did not have lunch with Martin and that he lunched alone at a Chinese restaurant, as was his practice on Mondays.

38 That night (Monday 25 May) Francis told his sister Leisa Francis, with whom he lived, of his conversation with Martin.

Monday 25 or Tuesday 26 May 1998

39 Francis met with Keenan in a coffee shop in Sydney and told him what had happened including his conversation with Martin (Francis says this happened on Monday 25 May 1998, Keenan says Tuesday 26 May 1998).

Tuesday 26 May 1998

40 Keenan telephoned Mark Dickens of the Balmain Club as to whether that Club was interested in engaging Francis. It was agreed that he (Keenan) would telephone Pearce. He did so, leaving a message for Pearce to telephone him.

41 Keenan telephoned Dr Gibbs and Martin. According to Keenan, Dr Gibbs told him that Francis wanted to have surgery on his shoulder, that Francis did not “feel he [could] be competitive with the injury”, and that Dr Gibbs had booked him in with a leading orthopaedic surgeon for an operation.

42 According to Keenan’s affidavit, Martin told him that Francis must be back playing in three weeks’ time, failing which he would have to find another club for the 1999 season because Souths would not re-sign him. According to Keenan’s affidavit, Martin also said that Souths would re-sign Francis if he played out the rest of the 1998 season, and that the choice was Francis’s. Keenan’s contemporaneous note stated only, “You’ll only re-sign Francis if he plays out the rest of the season and has op. after season finished”.

43 Keenan told Francis of his conversation with Martin, making a contemporaneous written note to the effect that Francis said he wanted both to stay at Souths and to have his shoulder “fixed”, but that he had “no choice” but to play out the season.

44 Francis saw Dr Biggs. (The evidence does not establish whether Francis saw Dr Biggs before or after Keenan spoke to Francis on this day.) Dr Biggs was not called as a witness. Dr McDonald, who was not in his surgery on Tuesday 26 May, says he telephoned Dr Biggs from his mobile phone and that Dr Biggs told him that he (Dr Biggs) had advised Francis that he had a good chance of recovery without surgery, and that he (Dr Biggs) could not promise him a better result with surgery. According to Dr McDonald, Dr Biggs told him that Francis was concerned over the appearance of his left shoulder and had said he wanted to have surgery. Finally, according to Dr McDonald, Dr Biggs said he had asked his secretary to arrange a booking for Francis for surgery.

45 Dr Biggs wrote to Dr McDonald on 26 May 1998. Dr McDonald says he would have received this letter after that date. The letter stated that Francis was not happy with the appearance of his shoulder and was keen to proceed to surgery. The letter advised that overall, “the results of early operative intervention are better than a late reconstruction, even though 80% of grade III AC joints do settle with conservative treatment”. The letter stated that Dr Biggs would arrange for Francis to undergo a reconstruction in “the not too distant future”.

Tuesday 26 May 1998 or Wednesday 27 May 1998

46 Leisa Francis telephoned Martin and claims Martin told her that Souths wanted Francis “back on the paddock” within three weeks; that there was no reason why he could not comply; that if he failed to comply Souths would not re-sign him for 1999; but that if he did comply Souths would re-sign him for 1999.

47 Dr McDonald says he telephoned Francis and told him that Dr Biggs agreed with him (Dr McDonald) that Francis had a good chance of recovery with conservative (non-surgical) treatment. He told Francis that he (Dr McDonald) would be recommending conservative treatment to Souths and that if Francis did not regain full function of the shoulder or was concerned with its appearance, he (Dr McDonald) could arrange for surgery to be performed at the end of the season. According to Dr McDonald, Francis said in strong terms that regardless of Dr Biggs’ advice and of the position being taken by Souths, he was going to see Dr Gibbs to have his shoulder fixed.

Wednesday 27 May 1998

48 Pearce returned Keenan’s telephone call. Keenan inquired whether the Balmain Club might be interested in Francis for the 1999 season (Keenan did not tell Pearce about Francis’s injury). According to Keenan, Pearce replied that Balmain would like to discuss the matter further after 30 June 1998 (there was an “anti-tampering” rule which prohibited discussions with players under contract with another club until after 30 June). Keenan informed Francis of the details of this conversation.

On or about Saturday 30 May 1998

49 According to Francis, outside Martin’s office, Martin told Francis of Leisa Francis’s telephone call and said that if Francis wanted a contract for 1999 he would have to be back on the field within three weeks.

50 According to Francis and his sister, that night at home, upon Francis’s raising the subject of her telephone call to Martin, she told her brother what Martin had said to her.

Shortly afterwards

51 Dr McDonald’s Monday “injury list” addressed to Martin stated in relation to Francis: “left A.C. joint injury (Continuing conservative management)”.

A few days to a week later

52 Francis changed his mind, deciding to play out the season and to defer his operation. He informed Dr Gibbs and Keenan of this decision and cancelled the appointment that he had with Dr Bokor for the operation. According to both Francis and Dr Gibbs, Dr Gibbs’ response when Francis told him of his decision was to advise him to make sure he had a contract with Souths for 1999, because if he had the operation after the end of the 1998 season he would miss pre-season training for 1999 which would make it difficult for him to secure a contract with another club for that year. Both Dr Gibbs and Francis say Francis replied that Martin had assured him that Souths would re-sign him for 1999.

53 (12) 29–31 May Francis did not play

2 June Francis recommenced training, but his training was
modified by head trainer, Scott Campbell (“Campbell”)

(13) 6/7 June Francis did not play

Monday 9 June 1998

54 Dr McDonald’s Monday “injury list” addressed to Martin stated in relation to Francis: “left A.C. joint (Unlikely to be fit to play this week)”.

(14) 12–14 June Francis did not play

Monday 15 June 1998

55 Dr McDonald’s Monday “injury list” addressed to Martin stated in relation to Francis: “left A.C. joint. (Possibly fit to play this week)”.

About a week before Francis’s return to the field for Round 15

56 According to Garlick, he and Francis had a conversation in Souths’ dressing room at Redfern Oval in which Francis sought Garlick’s opinion as to what course he should follow in relation to his shoulder; Garlick advised him to continue playing; and Francis said he had decided to do so because if he could not do himself any more damage, he had nothing to lose and he might as well continue playing and earning match fees. Francis denies that the conversation took place.

(15) 20/21 June Francis resumed playing. He says he was programmed to play

First Grade but was dropped to Reserve Grade for having been late for training.

57 From his resumption of play in Round 15 to Round 21, Francis’s weight training régime continued to be for lower body strength only; according to Campbell, Francis continued to have no weight training for upper body strength or heavy physical contact training. (Later, Campbell said that Francis could do “very little upper body strength training, including weights” and referred to Francis’s inability to undertake upper body weight training “to the maximum potential”.) As a result, according to both Francis and Campbell, Francis’s strength and bulk deteriorated.

58 From his resumption of play, Francis needed painkilling injections before matches, usually at half-time and sometimes after full-time.

Monday 22 June 1998

59 Dr McDonald’s Monday “injury list” addressed to Martin stated in relation to Francis: “left A.C. joint injury. (Fit to play)”.

60 Cookson and Keenan spoke on the telephone. They disagree in certain respects as to what was said. It is common ground that Cookson informed Keenan that Souths was not going to exercise its option over Francis for 1999. Ultimately, Keenan says Cookson said that Souths was interested in re-signing Francis and “would be prepared to discuss a lesser figure”. Cookson says he said merely that Souths “might be prepared to discuss” a lesser figure. The difference between their recollections is inconsequential for present purposes, in my view.

61 Cookson said that, as far as he was concerned, at the time:

· Souths was not “genuinely interested” in re-signing Francis for 1999;

· it was “fairly unlikely” that Souths would negotiate with Francis in the future; and

· there was no necessity to meet with Keenan “unless Souths was genuinely interested in re-signing [Francis] for the 1999 season”.

62 Keenan made a contemporaneous note of the conversation which stated “Club not exercising option. You happy to talk about a lesser figure. I’ll confirm this in writing”.

63 According to Keenan’s testimony, it did not surprise Keenan that Souths wanted to reduce the 1999 sign-on fee for Francis. The reason, he said, was that the “war” between the Australian Rugby League and the Super League had ended with the result that less teams, and therefore less players, were to be involved, with a consequential decrease in the market value of players “by as much as 30%”.

64 Shortly afterwards, according to Keenan, he telephoned Francis and told him that Cookson had said Souths would not be exercising its option because of the high sign-on fee, but was interested in re-signing him “with a lesser sign-on fee and a higher incentive”. Keenan says Francis responded by saying that he thought this might happen “now that the ARL and Super League war is over”. Francis asked Keenan how much Cookson wanted to pay as a sign-on fee and Keenan said he did not know but would write to Cookson.

A few days later (late June or early July 1998)

65 Francis telephoned Martin who also said that Souths was not going to exercise its option but said it was “looking to put [Francis] on a greater incentive contract with a lesser sign-on fee.” According to Francis, he replied “OK, that seems reasonable”. Francis says that he believed at the time that a new contract would be negotiated.

26 June 1998

66 Keenan wrote to Cookson purporting to confirm that Cookson had told him on 22 June that Souths would not exercise its option over Francis but was “prepared to discuss a lesser figure”. The letter invited a reply by 30 June 1998 if it misstated the effect of the conversation. There was no reply. Cookson testified orally that he had not replied because Keenan’s letter accurately reflected the conversation. Keenan testified orally that he had expected no reply.

67 Keenan says he tried to contact Cookson from 1 July to September 1998 about the issue of Souths’ interest in retaining Francis for the 1999 season. Cookson agrees, but in the context that his understanding was that Keenan was always wishing to speak to him about contracts for his clients, of whom Francis was one. Cookson said he saw no necessity for a meeting unless Souths “was genuinely interested” at some time in this period in re-signing Francis, and it was not.

(16) 26–28 June Francis played First Grade

30 June 1998

68 Souths’ Board of Directors noted a dispute between Martin and the Retention Committee over selection of the First Grade team and resolved to “put in place” a Selection Committee to select teams. A few days later, such a Committee, comprising George Piggins, Darrell Bampton and Martin, was in place.

(17) 3–5 July Francis played First Grade

(18) 10–12 July Francis played First Grade

Following Round 18 (apparently on 13 or 14 July 1998)

69 Souths stood down Martin as coach of the First Grade team and appointed Coleman caretaker Head Coach and coach of the First Grade team in his place until the end of the 1998 season. (Later, Coleman was appointed for the 1999 season also.) On Coleman’s recommendation, Souths’ Selection Committee (now George Piggins, Darrell Bampton and Coleman) selected Francis for the interchange bench rather than as a member of the run on team.

(19) 17–19 July Starting on the interchange bench, Francis played First

Grade.

(20) 24–26 July Starting on the interchange bench, Francis played First Grade.

Late July 1998 (following Round 20)

70 Keenan had a telephone conversation with Coleman in which, according to Keenan, Coleman said “I love Mick. Whilst I am at Souths, Mick will be at Souths”. Coleman denies making this statement. Subsequently, Keenan relayed to Francis the statement as attributed by him to Coleman.

(21) 31 July–2 August Starting on the interchange bench, Francis played First

Grade. (This was the last match he played in 1998.)

After Round 21

71 Francis says he decided that he could not continue playing because of pain and his deteriorated physical condition. Francis told Keenan he had decided to cease playing and to have his shoulder operation.

72 Campbell states that by this time Francis’s fitness and strength, particularly of his upper body, were poor. Coleman claims (Francis denies) that Souths’ Selection Committee, on his (Coleman’s) recommendation, dropped Francis to Reserve Grade. In Reserve Grade he would not earn match fees.

73 Francis says he told Coleman he could not continue because of pain and his deteriorated physical condition and that he wanted to have his operation, and that Coleman replied: “OK ... I will see you next year”. Coleman denies this conversation and claims (Francis denies) he told Francis he had better get to training and that Cookson was going to fine him for his failure to attend training.

On or about Thursday 6 August 1998

74 Francis told his sister of his decision to cease playing and of his conversation with Coleman.

(22) 7–9 August Francis did not play

12 August Souths terminated Martin’s contract

(23) 14–16 August Francis did not play

Towards the end of the 1998 season

75 Coleman says he informed Cookson and Darrell Bampton, both members of Souths’ Retention Committee, that he thought Souths should not retain Francis for 1999 because his performance was not up to First Grade standard, and that they accepted his recommendation.

(24) 21–23 August Francis did not play (Round 24 was the last round of the season

and was followed by five weeks of finals for which Souths did

not qualify)

Some time before 28 August 1998

76 Francis telephoned Dr Gibbs and told him he had ceased playing and wished to undergo surgery. Dr Gibbs said he would again refer Francis to Dr Bokor and did so.

Monday 28 August 1998

77 Dr Bokor reported to Dr Gibbs that he had again seen Francis and that arrangements would be made for surgery.

78 Dr McDonald’s Monday “injury list”, now addressed to Coleman, stated in relation to Francis: “left A.C. joint reconstruction”.

31 August 1998

79 This was the last day for notification by Souths of the exercise of its option over Francis for the 1999 season. As foreshadowed by Cookson on 22 June 1998, Souths did not exercise the option.

On or about 1 September 1998 (or perhaps as early as 28 August)

80 According to Francis’s affidavit, he went to see Pearce at Balmain Leagues Club to “cover” himself by “negotiating” with that club. Pearce told Francis he was concerned about his shoulder operation which he had left too late (the operation was yet to take place on 11 September 1998), and which would now cause him to miss pre-season training for the 1999 season. Pearce also told him he had lost a lot of bulk and that he would be behind the other players in pre-season training. Pearce said he would think about the matter further. After the conversation Pearce decided not to recommend to the Balmain Club’s Retention Committee that Francis be engaged for the 1999 season.

4 September 1998

81 Francis called on Dr Gibbs to collect the letter of referral to Dr Bokor for the operation. Francis subsequently made an appointment with Dr Bokor to have the operation.

11 September 1998

82 Francis underwent reconstructive surgery by Dr Bokor on his left AC joint.

28 October 1998

83 Francis and Keenan separately telephoned Dr Gibbs about a fine imposed by Souths on Francis for non-attendance at training.

2 November 1998

84 Dr Gibbs wrote to Cookson in support of Francis’s case for revocation of fines which Souths had imposed on him for non-attendance at training.

On or about 7 November 1998

85 Over coffee, Ian Rubin (“Rubin”), another Souths’ player, showed Francis a list of players whom Souths was signing for the 1999 season, from which it was clear that Souths did not intend to re-sign Francis (or Rubin). This signified to Francis that he was “released” to play for other clubs.

Later the same day or a few days later

86 Francis informed Keenan that his name did not appear on Souths’ list of players for 1999 and Keenan undertook to check the position. Keenan’s testimony was that the absence of Francis’s name from the list did not surprise him at all and that for some time, at least from Francis’s operation on 11 September 1998, he had thought it unlikely that Souths would wish to retain Francis at all for 1999. He said that he undertook to check the position with Cookson because Francis used to telephone him “all the time”, expressing concern over what he was going to be doing in 1999, and that he (Keenan) wanted “to put finality to the situation”.

87 Keenan obtained confirmation from Cookson and advised Francis. Francis went to see Cookson at the Charing Cross Hotel. The two men differ as to what was said. Francis says he asserted that he had continued to play for Souths after injuring his shoulder on the strength of representations made by Martin and Coleman that he would be re-signed for the 1999 season. Francis alleges that Cookson responded that the Club had changed its mind and that Francis was “worth a million dollars off the field, but not worth two bob on it”. Cookson denies that Francis made the alleged initial statement and denies making the response attributed to him.

15 November 1998

88 Cookson replied to Dr Gibbs’ letter of 2 November 1998 advising him that the fines would be revoked.

Late November 1998

89 Keenan asked Pearce whether Balmain was interested in Francis for 1999 and Pearce replied that he did not “think” Balmain was interested. (Keenan was to make a further unfruitful inquiry of Pearce on 4 February 1999.)

End of 1998

90 For financial reasons, Francis moved from Sydney to Terrigal on the New South Wales Central Coast to live. Living costs there were less than in Sydney and he was able to work in his family’s pizza business, where he continued to work down to the time of the hearing.

March/April 1999

91 Francis signed a contract to play for the Western Suburbs District Rugby League Football Club Ltd (“Wests”) which provided for match fees of $1,500 for a win and $750 for a draw in First Grade and no sign-on fee. Francis attended some training sessions with Wests but played only one match for that Club, and says that he decided to cease because of:

· the time and expense of travel to training and matches, for which Wests said it could not afford to reimburse him;

· the poor standing of Wests (it came last in the competition in 1998 and 1999);

· his unfitness because of lack of participation with any club in 1999 pre-season training; and

· Wests’ expectation that it would not be in the competition the following year (2000).

June 1999

92 Francis played in England for about 12 weeks, earning, he says, a “net” sum of about $5,000.

The year 2000

93 Souths was not included in the National Rugby League competition.

various written contractual arrangements

94 Several written contractual arrangements feature in the case. In discussing the first of them, I find it convenient also to resolve the important issues of the actual and apparent authority of coaches Martin and Coleman, and Francis’s (and Keenan’s) understanding as to their authority to commit Souths to engage Francis for the 1999 season.

1. Souths’ Retention Committee and Selection Committee

General– actual and apparent authority to engage players

95 In the first half of 1997 Souths entered into contractual arrangements with associated entities, including South Sydney Junior Rugby League Football Club Ltd (“Juniors”), which provided for the establishment of a “Retention Committee” and a “Selection Committee” for Souths. The arrangements presently relevant are found in a confidential “Offer” document (there were also a “Retention Committee Trust Deed” dated 28 February 1997 and a “Deed for Financial Assistance” dated 3 March 1997).

96 Juniors offered to provide financial assistance to Souths in each of 1997, 1998 and 1999 on certain conditions. One condition was that Souths would appoint Cookson as its Operations Manager as from a date not later than 1 January 1997. Another was that there was to be a Retention Committee comprising the Operations Manager, two nominees of Juniors and two nominees of Souths. The Retention Committee’s functions were to include the appointment of a coach for each Souths side, the appointment of a “Selection Committee” comprising three persons being the coach of the team being selected and two other persons, and:

“to negotiate with coaches, players, trainers, medical and administration staff, in the name and on behalf of Souths, but not to incur any personal liability in so doing, with a view to entering into contracts for services with those persons.”

The evidence suggests it was Souths’ Retention Committee that had appointed Martin as coach in about July or August 1997.

97 The Offer document also set out the functions of the Operations Manager, which included acting as Chairman of the Retention Committee, and, in the event of an equality of votes on that Committee, exercising a casting vote in addition to his ordinary vote.

98 Cookson testified that at the relevant time in 1998, the Retention Committee comprised himself as Chairman, two nominees of Juniors, namely, Rod Gorman and Stephen (Mick) Fisher, and two nominees of Souths, namely, George Piggins and Les Bell. (Mr Bell was later replaced by Darrell Bampton.)

99 I am satisfied that it was only the Retention Committee that had actual authority to exercise, or to undertake to exercise, Souths’ option over Francis for 1999, or to commit Souths to any other form of engagement of Francis for that year. The Retention Committee did not delegate that authority to anyone. In particular, it did not authorise Souths’ Head Coach and coach of its First Grade team, Martin (or, later, the caretaker Head Coach and coach of the First Grade team, Coleman), to promise Francis a contract for the 1999 season, or hold him out as having that authority, or implicate itself in any way in his making any such commitment. Nor is it established by the evidence that it was within the usual authority of a football club’s Head Coach and coach of its First Grade team to commit the club to engage a player, and so Martin (and Coleman) did not have ostensible authority to do so by reason of the holding of those positions. Further, there is no evidence to indicate that Souths allowed Martin (or Coleman) to act in a manner which might create the appearance that he had authority from Souths to engage a player.

100 The fact, if it was the fact, that the Retention Committee had always previously successfully negotiated a contract with every player recommended to it by the Head Coach, and by Martin in particular, does not establish that Martin had actual or apparent authority himself, to engage players, or that he was held out by Souths as having that authority. Nor is actual or apparent authority established by the fact, if it was the fact, that the Retention Committee never once imposed on Martin a player against his will. Nor is actual or apparent authority established by the fact that, as Keenan said, and I accept, there were cases in which he had not pursued trying to win over the Retention Committee because of his understanding that the coach would get his way, as the coach did, in favour of Keenan’s client.

101 I accept that in the ordinary course Martin would recommend to Souths’ Retention Committee the players he wanted for a season. No doubt Martin would take into account various factors in deciding upon the players to be recommended. I accept that the Retention Committee would not impose a player on him for a season unilaterally, without discussion with him or against his will. But ultimately it remained for the Committee to decide whether it could afford, and would sanction a negotiation with, all the players recommended by the coach. It was the Retention Committee that would decide whether to seek to engage a player, and it was Cookson who would negotiate terms with a player or his agent.

102 At the time of the parting of the ways between Souths and Martin in July 1998, they were in dispute as to whether the provisions of an unexecuted Coaching Services Agreement (“the CS Agreement”) between Souths and Steve Martin Consulting Limited (“SMC”), referred to below, were in force as the terms of the contractual arrangement between Souths and Martin or SMC. If they were, those terms and the terms of Francis’s 1996 Playing Contract, also referred to below, lend additional support to the proposition that Martin lacked actual or ostensible authority to commit Souths either to exercise its option in the 1996 Playing Contract or to engage Francis on any other particular terms or at all for 1999. But it is sufficient to say that Martin (and later, Coleman) lacked actual and apparent authority simply because they were no more than coaches and the evidence does not establish that either of them had greater actual or apparent authority to bind Souths than any authority which might ordinarily attach to the position of “coach”.

103 I accept that the Retention Committee would have “thought long and hard” before imposing on Martin for a season a player he did not want, and perhaps even before refusing outright to engage a player he did want, but it is a different thing to say that the Committee would necessarily engage any player he did want. A moment’s thought indicates that the amount of money available for payment to players would be a critical factor. Indeed, this matter was of such importance that the “Chief Executive’s Report” contained in Souths’ Annual Report for 1997, notes: “Frank Cookson, as ... Chairman of the Retention Committee had a difficult assignment in player purchases with the unrealistic value of players on the market”. Clearly, the amount of money to be paid for players was not within the province of a coach to determine. A coach might recommend the engagement of numerous highly priced players but his club might not have, or be willing to allocate, the required funds. If Martin had authority to commit Souths to engage for a forthcoming season any player he, as coach, might wish to have, including at a level of remuneration reasonable for the particular player, he could, and presumably would, commit Souths to the very best squad of available players, leaving it to Souths to find and pay a presumably large aggregate amount of remuneration which might well be beyond its financial capacity. It is noteworthy too that the amount of money a player is able to command is not constant throughout the player’s career. As younger players acquire new skills and experience and older players lose strength, energy and enthusiasm, the market value of a particular player will change. Accordingly, a player’s worth to a club will vary from season to season. Francis is a case in point.

104 Counsel for Francis appears to submit that a coach’s authority to select players for a particular game or for particular games bears upon the question of whether a player can expect to be re-signed. I reject this submission. The mere fact that a coach chooses a player for a particular game or for particular games does not mean that the club will wish to engage him in preference to others for the next season: other more desirable players may emerge. And if the club would like to engage the player for the following year’s season, the club’s financial circumstances and the fee which the player is able to command may put him outside the club’s capacity to pay.

105 In so far as Francis’s case relies on the ostensible authority of Martin or Coleman to commit Souths to engage Francis, it fails because neither of them was held out as having the requisite authority and because Francis did not believe either of them had authority.

106 In the absence of a holding out by Souths of its coach as authorised to engage players, or to commit Souths to engage them, any subjective understanding that Francis or Keenan may have had as to Martin’s (or Coleman’s) authority is irrelevant. But I make the following observations in relation to their understandings.

Francis’s understanding

107 I consider first, Francis’s own understanding as to Martin’s authority. It is noteworthy at the outset that upon learning of Francis’s decision to play on, Dr Gibbs advised Francis that if he was going to play through the season with painkillers and defer surgery until the off-season, he must make sure he had a contract with Souths.

108 Francis conceded that he had never negotiated a contract with a coach. Francis asserted, however, that “as far as [he] was concerned” Martin “was speaking for the Club”, and he explained, “He’s the first grade coach, he’s the boss, why wouldn’t I believe that?”. Francis said that his belief at the time was that Martin’s promise was a promise that the option would be exercised. Francis said that his understanding was that Martin decided what players should be engaged and that Cookson discussed the money with them. He said that “whatever [Martin] wanted, he got”. Thus, Francis understood that Martin had to “get” his way with a superior authority within Souths, even if Francis understood that he had always succeeded. I regard this testimony of Francis as to his understanding as testimony of his belief that Souths had always sought to give effect to Martin’s wishes as to the composition of the First Grade team for the forthcoming season, but that whether a contract eventuated depended on whether Cookson, on behalf of the Retention Committee, reached agreement with the player or his agent on terms, including fees.

109 Francis said that he understood there was a Retention Committee within Souths comprising Cookson, George Piggins “and a couple of Juniors people”, but said that Cookson had never explained that Committee’s role to him.

110 When asked whether he had believed as at 25 May 1998 that Martin had any authority to promise that the option would be exercised, Francis replied: “I believe Mr Martin had most of the authority as far as I was concerned.” Francis said that he understood there was some kind of committee in Souths with authority to “buy” players; that he did not know whether Martin was part of that committee; but that, be that as it may, Martin had “a lot of influence on the committee” because the committee would not buy players if the coach was not going to use them. He added: “So the coach has got 99 per cent of the influence on whoever he wants”. Asked specifically whether he understood that Cookson’s approval of the engagement of a player was required, he said: “It wasn’t just Mr Cookson, it was Mr Martin”.

111 In testifying in relation to the list of players shown to him on 7 November 1998 by Rubin, Francis stated “[t]here’s a list from Craig Coleman’s office so probably it wasn’t official but it give[s] you a good indication [of] who’s going to be there and who wasn’t [sic]”. This response by Francis also establishes that he understood that, although a coach’s wishes might carry great weight and influence as to whether a player should or should not be retained, ultimately a coach was incapable of concluding an arrangement on behalf of the Club in that respect.

112 There was evidence directed specifically to the question of Martin’s authority to exercise Souths’ option or to commit Souths to an exercise of it. In cross-examination, Francis acknowledged that at the time of entering into the 1996 Playing Contract he understood that the option had to be exercised, if it was to be exercised at all, by notice in writing by 31 August 1998. He also agreed that it was never his belief that Martin was entitled to give on behalf of Souths such a written notice of exercise of the option.

113 I think the state of Francis’s understanding in 1998 is exposed clearly enough by the evidence: he understood that neither Martin nor Coleman was able unilaterally to commit Souths to retain him for 1999. His understanding was that ultimately the most either of them could promise was that he would bring his no doubt important influence to bear in favour of a negotiation with Francis with a view to his retention. Therefore, Francis knew that there was at least some risk, which he had to assess, in relying on what either Martin or Coleman might say, and that they could do no more than pledge him their personal support in discussions with Cookson and the Retention Committee.

114 Souths submits that in addition to his subjective knowledge of the coaches’ lack of authority, Francis had notice of it through Keenan. In the course of negotiating the 1996 Playing Contract for Francis, Keenan received a letter dated 16 July 1996 from Cookson informing him that Souths’ Retention Committee had decided to make Francis the offer set out in that letter. Accordingly, in the course of performing what Francis had appointed him to do, negotiating a contract with a club for Francis’s services (see [128]-[131] below), Keenan was expressly informed that within Souths it was the Retention Committee which had authority to commit it contractually to players. If it matters (in view of the terms of Francis’s written retainer of AMI), Francis testified that he knew a manager’s function was to negotiate and advise, adding:

“All you’ve got to do is play football, he should look after the rest.”

I accept Souths’ submission that Francis had knowledge of the information conveyed to Keenan that the authority within Souths to decide to engage a player rested with the Retention Committee: cf Fuller v Benett (1843) 2 Hare 394 (67 ER 162); Vane v Vane (1872) LR 8 Ch App 383 at 399 per James LJ; Taylor v Yorkshire Insurance Co Ltd [1913] 2 IR 1; Ford Excavations Pty Ltd v Do Carmo [1981] 2 NSWLR 253 at 266 per Hutley JA.

Keenan’s understanding

115 My finding above as to Francis’s understanding makes any consideration of that of Keenan superfluous. I shall, however, briefly state my findings in relation to it without discussing the question of its potential relevance. I turn now to consider Keenan’s understanding as to Martin’s authority. Keenan conceded in cross-examination that he knew that contractual arrangements between Souths and players were the responsibility of Souths’ Retention Committee, of which he knew that no coach was a member. Keenan said that a club would not sign a player whom the coach did not want because the coach would not select him to play. He said:

“the first hurdle is to get the coach on side to push for the inclusion of the player in the playing squad for the following season. And, if you’ve got the coach’s support, then a lot of the times that can be enough because he’ll do the rest of the job for you.”

This testimony is inconsistent with a belief on Keenan’s part that a coach had authority unilaterally to engage players.

116 Later Keenan conceded that “in [his] mind there was clearly no contract [made by Martin] because if there was a contract [then he] would have sought to enforce it and ha[ve] the terms finalised”. Moreover, he said he reminded Francis that no money had been discussed “but that Steve had given his commitment that Mick would be there if he kept playing”. (my emphasis)

117 I think that like Francis, Keenan did not believe that Martin was in a position, without reference to any superior authority within Souths, to commit Souths to engage Francis for the 1999 season, whether on the terms of the option, or on other particular terms or at all, and that the most he could do was to pledge his personal support for retention of Francis in 1999.

2. The CS Agreement between Souths and SMC

118 Souths submits that the coaching services of Martin were provided to Souths pursuant to the CS Agreement. The copy of that agreement in evidence is not an original or a copy of an executed original: it is a copy of an “original” which bears certain initialling. It is not dated, apart from the typed year “1998”. As noted above, in July 1998, Souths and Martin were in dispute as to whether the terms of the document had contractual force. Souths did not lead evidence that it had paid SMC rather than Martin. Although I will discuss the CS Agreement below as if it had contractual force, my conclusion that Martin was not in such a position that his supposed promise could render Souths contractually liable is supported even if he was employed as Head Coach and coach of the First Grade team directly by Souths. The reason is that it was beyond the actual or apparent authority of a coach to engage players.

119 The CS Agreement recited that SMC was able to provide the professional football coaching services of Martin pursuant to a certain Service Agreement between SMC and Martin (not in evidence), and that SMC had negotiated with Souths for the provision of such services to Souths upon the terms and conditions set forth in the CS Agreement. Under cl 1 of the CS Agreement, the period of that Agreement was two years from 1 October 1997 to 30 September 1999. By cl 2 SMC undertook to provide to Souths:

“the services of Martin as a duly qualified rugby league football coach to provide the professional services of Head Coach for the South Sydney First Division Rugby League Football Teams for the 1998 and 1999 rugby league football seasons upon and subject to the terms and conditions contained in [the] Agreement.”

The 1998 season was defined as the season from 1 October 1997 to 30 September 1998 and the 1999 season as the season from 1 October 1998 to 30 September 1999 (cl 20).

120 SMC undertook to procure Martin’s ongoing performance as Head Coach for Souths in accordance with the terms and conditions set out in the document (cl 3). For example, Martin was to carry out to the best of his skills and ability “those duties reasonably and customarily required of a professional rugby league football coach”, which specifically included certain duties specified in the document. Martin was, “as Chairman of Selectors, [to] be responsible for all Senior Grade team’s [sic] selections in conjunction with the Selection Panel”. The penultimate par (g) of subcl 3(iv), provided that Martin was to be answerable to the Football Manager (Cookson) and to the Retention Committee, when and if required.

121 In sum, if the CS Agreement was in force, Martin was still no more than a “professional rugby league football coach”, albeit not one employed by Souths, and he had no actual or ostensible authority, by reason of occupying that position, to commit Souths to engage a player.

122 There was evidence, which I accept, that down to 30 June 1998, Martin selected the players to play in the First Grade team each week after discussion with other Souths coaches and without reference to any Selection Panel. The issue of the right of selection of those to play was a source of dispute between Martin and Souths’ Retention Committee. It was not until 30 June 1998 that Souths’ Board of Directors appointed a Selection Committee, although the Offer document discussed earlier had provided for it to do so. Martin asserted to Souths that when he was appointed he was assured he would have the ultimate say over the selection of players to compose the teams for matches. But whether before or after the change made as from early July 1998, Martin was only ever a coach. Selection of the players to play in a particular match or in particular matches is vastly different from contracting with players for a forthcoming season – a business transaction involving a financial commitment.

123 SMC was retained by Souths “as an independent contractor and not as an employee” and neither SMC nor any of its employees (including Martin) was entitled to receive from Souths any rights, benefits or emoluments payable to employees (cl 9).

124 It was agreed between Souths and SMC that nothing in the CS Agreement constituted them as partners, joint venturers or master and servant (cl 14).

125 The provisions noted in the last two paragraphs do not determine the true legal character of the relationship between Souths and SMC or between Souths and Martin. Contracting parties commonly expressly designate a class of legal relationship to which they agree the relationship between them is to belong, or not to belong, with a view to achieving or avoiding certain legal consequences, but it always remains possible that on all the evidence the legal relationship between them will be found to be something inconsistent with their express agreement: cf Ex parte Delhasse; Re Megevand (1878) LR 7 Ch D 511 at 526, 528, 532; Adam v Newbigging (1888) LR 13 App Cas 308 at 315; R v Foster; Ex parte Commonwealth Life (Amalgamated) Assurances Ltd (1952) 85 CLR 138 at 150-151; Garnac Grain Co Inc v HMF Faure & Fairclough Ltd [1968] AC 1130; Colbron v St Bees Island Pty Ltd (1995) 56 FCR 303 at 314. I have not relied on the provisions referred to in order to determine the true nature of the legal relationship between Souths and Martin and I will say no more of them.

126 Clause 15 of the CS Agreement was as follows:

“The Contractor [SMC] agrees and undertakes at no time to expressly or impliedly bind attempt to bind or purport to bind the Club [Souths] in any way nor shall the Contractor represent to any party that it or Martin is an employee, servant or agent of the Club.”

This provision, though effective as a contractual promise by SMC to Souths, is of no relevance to the question of whether Martin could render Souths liable to Francis, who, of course, knew nothing of the clause.

127 When Martin conversed with Francis, his role was, relevantly, nothing more than that of Head Coach and coach of Souths’ First Grade Team. Neither he nor SMC had authority under the CS Agreement to bind Souths to exercise its option contained in the 1996 Playing Contract or to bind it to re-sign Francis on any other particular terms or at all. If the copy of the CS Agreement in evidence does not reflect the contractual arrangement between Souths and SMC, again Martin did not, by reason of his position as Head Coach and coach of the First Grade team, even if employed as such directly by Souths, have actual or apparent authority to bind Souths to exercise an option over a player or to engage a player on other particular terms or at all.

3. The Agreement (between Francis and AMI)

128 By cl 3.1 of the Agreement dated 1 July 1996 between AMI and Francis, Francis appointed AMI “as his exclusive agent and manager” for the term of the Agreement in relation to “Management Services”. By cl 4, AMI undertook to provide to Francis the “Management Services” defined in that clause. Those services included the giving of general advice (when requested by Francis) as to his career in the Game and related opportunities; endeavouring to attract contract offers; and negotiating terms acceptable to Francis in respect of offers made to him by potential employers.

129 Clause 3.5 of the Agreement provided that the parties agreed that no partnership, joint venture or any other form of arrangement or understanding was created by the Agreement “other than the agency and management relationship as [was] specifically provided for by [the] Agreement”.

130 By cl 6, AMI was authorised by Francis to do all things AMI considered necessary to carry out and perform the Management Services, including to represent and hold itself out to third parties, including employers, both actual and potential, as Francis’s “exclusive agent and manager”.

131 The terms of the Agreement are relevant to the questions whether a communication by Souths to Keenan is to be treated as a communication to Francis and whether knowledge acquired by Keenan in the course of representing Francis pursuant to the Agreement is to be treated as knowledge acquired by Francis.

4. The 1996 Playing Contract

132 I noted at [26] certain background to the making of the 1996 Playing Contract.

133 It is obvious that a professional footballer may be injured during his career, and that injuries may disable him from playing for periods of varying duration. It is to be expected that a contract between a club and a player will provide for this possibility. The standard form of Australian Rugby League and New South Wales Rugby League Playing Contract, which was used as the basis for the 1996 Playing Contract, does so. It seeks to strike a balance between the interests of a club and a player. Ultimately, the player will have his way in the sense that he cannot be forced to play against his will. However, his contract can put him in breach of contract in refusing to play. But, to give the club unqualified power to require an injured player to return to the field would be unreasonable and so we find that the club’s power in this respect is qualified by reference to reasonableness.

134 The 1996 Playing Contract contained the following provisions:

“1. employer/employee relationship

The parties hereto 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.

...

3. services

The Player will –

(a) whenever and wherever reasonably required, during the playing season(s) of the New South Wales Rugby League Limited (‘the League’), well and faithfully and to the best of his ability and skill play the Game for the Club in such team and grade as the Club shall from time to time specify;

(b) report promptly for, and participate fully in, all pre-season and post-season Games and all training sessions conducted by, or participated in, by the Club;

(d) obey all reasonable directions of the Club relating to training for and playing the Game;

...

4. payment

(1) Subject to the provisions of this Agreement the Club will pay to the Player, in respect of premiership competition Games played by the Player for the Club, the premiership competition match fees calculated by reference to Schedule One, paragraphs 1 and 3. All premiership competition match fees earned by the Player up to and including 30^th day of June in each year, during the currency of this Agreement, shall be paid to the Player during the last seven (7) days of July in the then current year and the balance of such match fees shall be so paid within the last seven (7) days of October in that year.

(2) Subject to the provisions of this Agreement, the Club will pay to the Player the playing fee calculated by reference to Schedule One, paragraphs 2 and 3. The playing fee shall be payable separately in each season during the currency of this Agreement by two equal instalments, the first payable during the last seven (7) days of July in the then current year and the second payable during the last seven (7) days of October in that year. Provided that in the event that this contract is lawfully terminated prior to the date when either of such instalments becomes payable, the Player shall only be entitled to receive so much of the impending instalment as shall have accrued to the Player on a pro rata basis in accordance with clause 8 of this contract.

(3) The payments referred to in sub-clauses (1) and (2) may, by agreement between the Player and the Club, be made by more frequent instalments than those shown in the said sub-clauses.

...

7. warranty as to physical and medical condition

... Where, in the reasonable opinion of the Club, the Player would be exposed to a greater than usual risk to his health or to a greater than usual risk of injury by playing Rugby League Football because of a physical or medical condition, the Club may terminate this Agreement by payment to the Player of all monies due to him pursuant to this contract at the date of such termination, whereupon the Club shall be discharged from any liability to pay any instalments of playing fees or premiership competition match fees, which would otherwise have thereafter become due and payable to the Player, except in respect of playing fees which may have accrued to the Player on a pro rata basis calculated from the date on which the Player commences training with the Club for the season to the date on which this Agreement is terminated. In the event of any dispute between the parties in relation to a termination by the Club pursuant to this clause, the Player shall be able to refer the dispute to the Appeals Committee of the League.

...

10. misconduct and the integrity of the game

(1) The Player shall not misconduct himself or otherwise act in a manner inconsistent with the integrity of the Game during the term of this contract.

(2) If the Club is of the opinion that the Player has been guilty of misconduct or has acted in a manner inconsistent with the integrity of the Game it may charge the Player in respect of that misconduct or act.

(3) Without limiting the generality of the expression ‘misconduct’ or the expression ‘acted in a manner inconsistent with the integrity of the Game’ those expressions shall include the following:

(a) ...

(b) ...

(d) ...

(e) ...

(f) failing to obey a reasonable direction of the Club relating to training for and/or playing the Game;

...

20. duties of player

The Player agrees during the term of this Agreement that:–

(a) he will immediately report any injury of any nature to the Club Medical Officer and faithfully carry out any reasonable instructions given to him by the Club Medical Officer including the wearing or use of any protective equipment recommended by the Club Medical Officer provided that no claim will be recognised by the Club for medical or other expenses if the Player was not, at the time of the injury, wearing or using the protective equipment recommended by the Club Medical Officer;

(b) he will not undertake any medical treatment with regard to any injuries sustained whilst training or playing rugby league for the Club without the prior consent of the Club, such consent not to be unreasonably withheld. ...

21. representations

The Player acknowledges:–

(a) that no official or any other person has authority to expressly or ostensibly vary the terms of this Agreement or to constitute a new or collateral Agreement of any nature on behalf of the Club; and

(b) that no variation to this Agreement or any new or collateral agreement shall be binding upon the Club or the Player until a formal agreement has been signed by both the Player and the Club.” (my emphasis)

135 Keenan testified that he was reasonably familiar with the terms of the standard form of contract, and, in particular, was well acquainted with cl 21. When asked if he had explained it to Francis, he replied that “I can’t recall specifically, but I would have”. Francis said he did not read cl 21, but in the absence of any special circumstances, of which none were pleaded or proved, he is bound by it by virtue of his having signed the contract containing it.

136 Clause 21 can, however, be of little, if any, assistance to Souths. At most, it can have some evidentiary effect. Any variation or new or collateral agreement was not required by the law to be in writing or evidenced in writing. The clause could not prevent a variation or a new or collateral agreement binding on Souths from coming into being through the conduct of an “official or any other person” or informally, if that was found in fact to have occurred. I do not rely on cl 21 at all.

137 In submissions, considerable attention was devoted to cl 21. Only for this reason, will I deal briefly with Francis’s submission that the clause does not assist Souths because:

(a) on its proper construction, it does not relate to the 1999 playing season; and

(b) Cookson had such a role in negotiating Francis’s 1996 Playing Contract, notwithstanding the presence of an identical cl 21 in Francis’s 1995 Playing Contract with Souths, that Souths is precluded from relying on the same clause in the 1996 Playing Contract.

138 As to (a), the supposed Contract for the 1999 Season was a “new contract” and I see no reason to treat those words in cl 21 as referring only to a new contract in respect of the 1998 season, particularly in view of the fact that the 1996 Playing Contract included the option for the 1999 season. As to (b), I do not think the course of negotiation between Cookson, Keenan and Francis which led to the making of the 1996 Playing Contract shows that Souths became contractually bound by Cookson’s conduct prior to the actual making of that contract.

139 The “special conditions” in the 1996 Playing Contract included the following option:

“The district clubs [sic – “District Club” or “Souths”] holds an option on the player for the 1999 playing season with a sign on fee of $150,000.00 plus $1,500.00 for every First Grade game in which he participates either as a member of the starting line up or as a fresh Reserve.

The District club will inform the player in writing by the 31^st August 1998 of their intention to execute this option and the player shall sign this agreement with 21 days of notice.”

Keenan and Francis testified that Keenan explained the option to Francis before he signed the 1996 Playing Contract. Francis said he read the special conditions and understood them and that they were “not hard to work out”. In particular, he said he understood that if Souths wanted to exercise its option to retain him for 1999, it had to give him written notice of its desire to do so by 31 August 1998.

140 Neither the Retention Committee nor Cookson nor anyone else at Souths did anything to estop Souths from relying on Souths’ non-exercise of the option by notice in writing to Francis by 31 August 1998.

certain aspects of the evidence

1. Witnesses – credit

141 Francis relied heavily, but not exclusively, on certain conversations. In most cases, only the two participants were present. In all cases there is a conflict about what was said. In his case on contract, Francis bears the onus of establishing that Souths promised to engage him for the 1999 season, either on the terms of Souths’ option or on other terms to which Francis was prepared to agree.

142 The main conversations were:

(a) A face to face conversation between Francis and Martin on Monday 25 May 1998 in the presence of Coleman;

(b) A telephone conversation between Keenan and Martin on Tuesday 26 May 1998;

(d) A face to face conversation between Francis and Martin on or about Saturday 30 May 1998;

(e) A telephone conversation between Keenan and Cookson on Monday 22 June 1998 (the non-exercise of option conversation);

(f) A telephone conversation between Keenan and Coleman in late July 1998, following Round 20 (the “I love Mick” conversation).

143 Only Keenan, a non-practising solicitor, made contemporaneous notes of the conversations. Often Francis, Cookson and Coleman were rather inarticulate in expressing themselves in the witness box. I have read the transcript of their evidence carefully in order to satisfy myself that I have correctly understood their testimony. I do not think that any witness deliberately gave false or misleading evidence. I would resolve testimonial conflicts by reference to other indications of the probabilities.

2. Failure of either party to call Martin

144 Francis claims that Martin bound Souths by a promise that Souths would retain Francis for the 1999 season if Francis resumed playing after a three-week break rather than have immediate reconstructive surgery on his left AC joint. According to the Pleading, the only words of Martin on which Francis relies as giving rise to the Contract for the 1999 Season are the words allegedly spoken by Martin to Francis himself on or about Monday 25 May 1998. The first two Representations, however, are pleaded as having been made by Martin orally, to Francis, and separately to Keenan, in each case on or about 25 May 1998.

145 Neither party called Martin as a witness. Francis submits that I should draw an inference against Souths on the basis of Jones v Dunkel (1959) 101 CLR 298. Souths submits, on the same basis, that I should draw an inference adverse to Francis. The inference in question is that Souths (or Francis) did not call Martin because it (he) feared to do so because his testimony would not have assisted Souths (Francis). I will call this “the Jones v Dunkel inference”.

146 Three general matters should be noted at the outset. First, in relation to the first conversation between Francis and Martin, Souths had available to it Coleman’s recollection of the conversation and it called Coleman as a witness. Secondly, there was no evidence as to the whereabouts, health or state of recollection of Martin, and I proceed on the basis that it was open to either party to call him as a witness. Thirdly, there is no evidence that either party knew what evidence Martin would give, if called.

147 On the hearing, Souths read, over objection, an affidavit of Nicholas George Pappas sworn 1 June 2001, Souths’ solicitor in this proceeding. The purpose of the affidavit was to explain why Souths had not called Martin. The affidavit showed that:

· On or about 14 July 1998 Souths stood Martin down as coach after a dispute arose between him and Souths;

· On 12 August 1998 Souths terminated Martin’s contract (I take this to be a reference to the contract between Souths and SMC);

· Martin commenced a proceeding against Souths in the District Court of New South Wales at Sydney on 2 October 1998 in which Martin sought damages from Souths for breach of contract;

· The dispute between Souths and Martin was the subject of an arbitration hearing on 21 and 22 June 1999;

· There was a “re-hearing” of the proceeding before her Honour Judge Gibb between 28 and 31 May 2000;

· The proceeding was settled prior to the conclusion of the hearing in the District Court;

· Since that time there has been no contact between Souths and Martin.

148 All three of the following requirements must be met before I may draw the Jones v Dunkel inference:

“(a) the missing witness would be expected to be called by one party rather than the other,

(b) his evidence would elucidate a particular matter,

149 Condition (b) is satisfied but conditions (a) and (c) are not.

150 Conditions (a) and (c) may “overlap” in the sense that the circumstances, or some of the circumstances, which prevent one from being satisfied, may also be the circumstances, or some of the circumstances, which prevent the other from being satisfied. That is the case here.

151 Whether I should draw the inference against Souths depends, in the first instance, on the closeness of the relationship between Souths and Martin (cf Heydon, Cross on Evidence (6^th Austn edition, 2000) at [1215], p35, cited with approval in Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157 at [64] per Hill and Finkelstein JJ). From about 14 July 1998, if not before, Martin was, I infer, hostile towards Souths, and the hostility of a witness has been viewed as a satisfactory explanation for a failure to call him or her (cf Smith v Samuels (1976) 12 SASR 573 at 581 per Bray CJ). From 12 August 1998 to some time shortly after 31 May 2000 the only contact between Souths and Martin was of an adversarial nature, and from the end of that period, Souths has had no contact with him whatever. (The fact that the relationship between a company and its former executive had long since come to an end was one of the circumstances accepted as affording a satisfactory explanation of the company’s failure to call the person as a witness in Shum Yip Properties Development Ltd v Chatswood Investment and Development Co Pty Ltd (2002) 40 ACSR 619 at [64].)

152 I infer that Martin would not have cooperated with Souths, and, in particular, would not have been willing to confer with Souths’ legal advisers prior to giving evidence. “A party is not, under pain of a detrimental inference, required to call a witness ‘blind’ ”: Fabre v Arenales (1992) 27 NSWLR 437 (CA) at 450 per Mahoney JA, with whom Priestley and Sheller JJA agreed.

153 In the circumstances, I would not expect Souths, rather than Francis, to call Martin, and Souths’ omission to call him is satisfactorily explained.

154 For the above reasons, I do not draw the Jones v Dunkel inference against Souths in respect of Martin’s alleged statement to Francis on Monday 25 May 1998.

155 I also do not draw the Jones v Dunkel inference against Souths in respect of:

Martin’s alleged statement to Keenan on the telephone on Tuesday 26 May 1998;
his alleged statement to Leisa Francis on or about Tuesday 26 May 1998; and
his alleged face to face statement to Francis on or about Saturday 30 May 1998;

for the reasons I gave above for not drawing it in respect of his conversation with Francis on Monday 25 May 1998, except one of those reasons: the availability to, and calling by, Souths of a third party witness to the conversation (Coleman).

156 Should the Jones v Dunkel inference be drawn against Francis for his failure to call Martin? No – as noted earlier, condition (b) is satisfied but conditions (a) and (c) are not. Francis’s relationship with Martin had been that of player and coach. Francis was in a position to lead, and did lead, evidence of the words alleged to have been spoken by Martin. I would not expect him to have called Martin to corroborate that evidence. I would expect Martin to be uncooperative towards Francis because, if he were found to have made the promise which Francis alleges he made, Souths was likely to contend that he did so without its authority and therefore that he was liable to indemnify it in respect of any liability which it might be found to have incurred to Francis as a result.

157 In the circumstances, I would not expect Francis, rather than Souths, to call Martin, and Francis’s omission to call him is satisfactorily explained.

158 For the above reasons, I do not draw the Jones v Dunkel inference against Francis.

3. Martin’s alleged statement to Francis in their face to face conversation on Monday
25 May 1998

159 According to Francis’s affidavit testimony, he invited Martin to look at the X-rays of his shoulder – an invitation which Martin declined – and told Martin that Dr Gibbs had recommended immediate surgery. Francis said that Martin telephoned Mark Beavin (“Beavin”), Souths’ physiotherapist, on his mobile phone, then said to Francis:

“Beavin tells me that Hill from Manly-Warringah has the same injury and he has continued to play and you can do the same. You will be on the paddock in three weeks or find another Club. Remember your contract runs out this year [on 31 October 1998] and if you play out the rest of the football playing season we will re-sign you next year.”

Coleman does not recall any conversation about X-rays and does not recall Martin telephoning Beavin. Coleman states that Martin did not say anything to the effect of the last two sentences, but said:

“Your best chance of a contract with Souths next year is if you get onto the paddock as soon as possible.”

In cross-examination, at various points, Coleman said that Martin spoke to Francis to the following effect:

“Steve Martin just said to him he should get himself back on to the field if he was looking to stay next year.”

and

“get back on the field and show us that you are worthy to play next year.”

and

“if you want to get signed for next year, you’d best go out and show what you can do.”

160 There is a difference between a positive conditional promise, such as, “If you are back on the field in three weeks, Souths will give you a contract for next year”, and a statement of a condition precedent, such as, “If you are not back on the field in three weeks’ time, Souths will not give you a contract for next year”. Francis testified that Martin made statements of both kinds.

161 Both Francis and Coleman were attempting, for the first time in the first half of 2001, to record a brief conversation (Francis estimated that it lasted some ten minutes) which had occurred between Martin and Francis on 25 May 1998. I did not find the testimony of either witness particularly persuasive on the critical issue of whether Martin made a positive promise or representation. It is unlikely that either of them remembered the conversation word for word, and it is likely that the recollection of each is affected by elements of interpretation, interest and context.

162 I accept Francis’s testimony in relation to the X-rays and Martin’s having telephoned Beavin and reported what Beavin had told him about Mr Hill. Those features are striking and it is unlikely that Francis would have mistakenly remembered them if they did not happen. Acceptance of Francis’s testimony in these respects does not, however, make it more or less likely that Martin made the positive promise on which Francis relies.

163 The evidence led by Francis of early recountings of things said by Martin was not admitted as evidence of what Martin said as to which it was clearly hearsay: cf s 59 of the Evidence Act 1995 (Cth). That evidence was, however, admitted over objection as evidence of the fact of communication, and, in the case of recountings by Francis, as evidence of his state of mind at the time of the recounting, to the extent that his state of mind at that time might be relevant on the issue of inducement: cf s 60 of the Evidence Act; Papakosmas v The Queen (1999) 196 CLR 297 at [48] and cases referred to in fn(32). The recounting evidence was generally to the following effect:

Francis’s affidavit version of the account of his conversation with Martin which he gave to Keenan omitted any reference to the making of the positive promise (on the hearing, however, Francis insisted he did tell Keenan that Martin had made him that positive promise);
Keenan’s affidavit version of Francis’s recounting to him of his conversation with Martin, to which he adhered in the witness box, included mention of the making of a positive promise, but, contrary to his usual practice, he had made no contemporary diary note of this particular conversation between him and Francis;
Francis’s affidavit version of his conversation with his sister Leisa has Martin making the positive promise;
Leisa Francis’s affidavit has Francis telling her only of Martin’s instruction to him to be back on the field in three weeks, without any mention of either the positive promise or the threat (in the witness box, however, she said her brother relayed both to her);

· Francis’s and Dr Gibbs’ affidavit versions of Francis’s explanation to Dr Gibbs of the reason for his change of mind has Martin making Francis both the positive promise and the threat.

164 Notwithstanding the limited basis on which the recounting evidence was admitted, both parties addressed submissions to it as if it was probative on the issue of the making of the promise by Martin (even so regarded, it was equivocal). The recounting evidence could have been evidence only of the recounter’s understanding, at the time of the recounting, of what Martin had earlier said to him, and of the communication of that understanding. If the recounter was labouring under a misapprehension of what Martin had said, he would relay his misapprehension to others. While statements by Francis to others that Martin had made him a positive promise would rebut any suggestion of later invention by Francis, whether Martin made Francis the promise alleged is to be decided by reference to the testimony of Francis and Coleman as to what Martin said and the background circumstances.

165 It is clear that Martin was giving Francis a firm direction to return to the field rather than have immediate surgery. I think it clear that Martin reinforced his direction with an express or implied threat that if Francis did not do as he was told by returning to the field, he “could forget” having any contract with Souths in 1999. The direction and the threat sit well together. Moreover, there was a point to the threat: if Martin did not see Francis performing any more in 1998, there would not be an up-to-date basis on which he could, in due course, recommend that Francis be retained. Finally, as noted earlier, the threat was of a kind that was likely to be implemented by Souths: if Martin recommended against retention, the Retention Committee would be unlikely to retain Francis against Martin’s will.

166 But why would Martin also make a positive promise? No doubt he could have done so, but I am not persuaded, on the balance of probabilities, that he did.

167 First, the background is of some significance. Souths was running equal last in the competition (on four competition points with three other teams), which was only about halfway through. Souths had little chance of reaching the finals. It is unlikely that Martin would, in May 1998, limit his options for 1999, merely for the sake of getting a member of the losing team of 1998 back onto the field.

168 Secondly, although no doubt their knowledge of the detail may have differed as between Martin, Coleman and Francis, they all knew that it was for a committee and Cookson, rather than Martin, to decide whether Francis was to be offered a contract for the next season and, if so, on what terms. I infer that Martin understood that Coleman and Francis knew or might well have known that he (Martin) had no authority unilaterally to commit Souths to engage Francis for the 1999 season. It is unlikely that Martin would purport to make a commitment then and there on behalf of Souths, which, according to his understanding, he and the other two persons present knew, or might well have known, he was not entitled to make. It was surely sufficient for Martin’s purpose simply to say to Francis that if he (Francis) did not resume playing after a lay-off of three weeks, he would not have a contract for 1999.

169 Thirdly, on an occasion when Francis freely stated why, following his conversation with Martin, he had consulted Keenan “to sort some sense out of” the situation, he said:

“Well, I wanted to have the operation, I didn’t want to play and Steve Martin made it loud and clear what my options [were] and I wanted to stay at the club. I always wanted to be at the club so I was just doing what the club told me to do. I’m just going – I’m just doing what I was told. That’s it. Just keep everyone happy, I didn’t want – I just wanted to be there. That’s it.”

While not conclusive, this passage suggests a threat and not a positive promise.

170 All in all, I am not satisfied on the balance of probabilities that Martin made the positive promise on which Francis relies. I think Francis persuaded himself that the threat, “Obey or leave”, amounted to a positive promise, “Obey and stay”.

4. Martin’s alleged statement to Keenan over the telephone on Tuesday 26 May 1998

171 In submissions, Francis relies on a promise which, he submits, was made by Martin to him by being made by Martin to his agent, Keenan, on Tuesday 26 May 1998. The Pleading does not give this conversation between Martin and Keenan as a particular of the Contract for the 1999 Season, but gives it as a particular of the first two of the three Representations.

172 Keenan’s affidavit version of this conversation was as follows:

[Keenan] “Steve, I am Michael Francis’s Manager and I have just spoken with him. He tells me he injured his shoulder on Sunday 24 May 1998 and that Dr. Gibbs has diagnosed it as a Grade III A-C dislocation. He further tells me that Dr. Gibbs says he should have an operation immediately, which will prevent further injury, and give it the best chance of fully healing and he would be ready to play next year including the pre-season period.”

[Martin] “Michael must be on the paddock in three weeks or the Club will not re-sign him next year. I need Michael out there. If he doesn’t start playing within three weeks, he can find another Club next year as the Club will not re-sign him. If he does play out the season with his shoulder, the Club will sign him. Greg, the choice is his.” (my emphasis)

173 Keenan made a contemporaneous note as follows:

“P/C to Martin

- You’ll only re-sign Francis if he plays out the rest of the season and has op. after season finished.”

Importantly, the file note, made by a solicitor, is of the threat alone, and omits the positive promise. Keenan immediately telephoned Francis to inform him of his conversation with Martin. Keenan made a contemporary note of his conversation with Francis, which immediately followed on the page the note of his conversation with Martin, and was as follows:

“P/C to Mick re above –

- You want to stay at Souths. You want to get shoulder fixed but have no choice.”

Keenan’s affidavit testimony of what he said to Francis was as follows:

“Mike, I have just spoken with Steve Martin. He said to me that your playing contract expires at the end of the year and that he will only re-sign you if you play out the rest of the season with the injury and have the operation after the season finishes. He then said otherwise you’re to find a new club next year as he won’t re-sign you.”

Francis’s affidavit testimony of what Keenan told him was as follows:

“Mike, I have just spoken with Martin. He said to me that your playing contract expires at the end of the year and that the Club will only re-sign you if you play out the rest of the season with the injury and have the operation after the season finishes. Mike, he said otherwise find a new club for next year.”

Thus, the virtually identical affidavit testimony of Francis and Keenan as to the recounting by Keenan to Francis of Keenan’s conversation with Martin does not refer to Martin’s alleged positive promise to Keenan, “If he does play out the season with his shoulder, the Club will sign him”. There was no cross-examination of Keenan or Francis in relation to this recounting conversation.

174 Counsel for Souths submits that I should accept Keenan’s contemporaneous diary note in preference to the version of his conversation with Martin that Keenan gives in his affidavit made thirty-two months later. Counsel for Souths also makes various attacks on the latter version. For example, he submits that it is unlikely that the conversation would have commenced with Keenan introducing himself to Martin as Francis’s manager, in view of the fact that, as Keenan conceded in cross-examination, Martin would already have known that Keenan was Francis’s Manager and it was not necessary that Keenan inform him of that fact. Keenan also conceded in cross-examination that perhaps he did not say to Martin “on Sunday 24 May 1998”.

175 I accept Keenan’s contemporaneous file note as his best summary of his understanding of the gist of what Martin said to him, but I do not regard the affidavit evidence of Keenan and Francis as inconsistent with it. In fact, the file note is consistent with both Francis’s affidavit versions of what Keenan had reported to Francis, that is to say, of what, at the time of that reporting, Keenan understood Martin to have said to him. If Martin had indeed conveyed to Keenan the alleged promise, I would have expected Keenan to have recorded it in his file note and to have relayed it to his client. The file note and affidavits refer to a condition precedent to Souths’ re-signing Francis, namely, his playing out the rest of the season and deferring his operation, and they leave open the possibility that, even if the condition precedent was satisfied, Souths might not re-sign him. The file note and recounting evidence are consistent with the first and third sentences which Keenan attributes to Martin in his affidavit version of the Martin-Keenan conversation. It is only the fourth (penultimate) sentence there attributed to Martin which introduces a positive promise. The file note does not go so far. I am not persuaded that Martin went so far either.

5. Martin’s alleged statement to Leisa Francis on or about Tuesday 26 May 1998

176 Francis relies on a promise which he submits Martin made to him by making it to his sister, Leisa Francis, on or about Tuesday 26 May 1998 (this was not pleaded). At the time, Francis was living with his sister.

177 Ms Francis testified that she telephoned Martin on or about Tuesday 26 May 1998 expressing concern about her brother’s shoulder injury and his state of health as a result of that injury. According to her affidavit, the telephone conversation included the following:

[Martin] “Michael should be going to physio and as far as we are concerned, we want Michael to be back on the paddock within 3 weeks. There should be no reason why he cannot. I don’t know whether or not you know about Michael’s contract for next year.”

[Leisa Francis] “No, I don’t know anything about Michael’s contract as Michael’s contract is none of my business.”

[Martin] “Well I will tell you about Michael’s contract. The Club has an option over Michael at the end of the year which is a rather lucrative deal. If Michael is back on the field within 3 weeks then he doesn’t have a problem with us taking up his option for next year. If he isn’t, then we will not take up the option. We will not re-sign him. The choice is his.” (my emphasis)

Ms Francis deposed that later in the conversation Martin said:

“The offer by the Club to Michael for 1999 is a very lucrative offer and Michael should keep this in mind.”

and later in the conversation:

“Thank you for your call but as I said earlier if Michael wants to be re-signed next year, then he better be playing in 3 weeks. Otherwise, he will not have a contract with the Club next year.”

and yet later in the conversation:

“If Michael is on the paddock within 3 weeks the Club will re-sign him next year. If he has his operation the Club will not re-sign him. Once again the choice is his.” (my emphasis)

178 The first (and emphasised) sentence in the sixth and final passage set out above is unequivocally a positive promise. On careful consideration, I think that the third (and emphasised) sentence in the second passage attributed to Martin (the third passage set out above) is not. I think it is only a statement that, if Francis resumed playing within three weeks, a bar to Souths’ exercising its option which would otherwise have existed, would have disappeared.

179 Martin’s reference to the “offer by the Club” was clearly a reference to the terms of Souths’ option over Francis for 1999. In that part of the conversation, Martin was, in effect, pointing out that exercise of the option was a prize worth Francis’s striving for.

180 I am not satisfied that Ms Francis told Francis of Martin’s offer. In their affidavits, neither Francis nor his sister testified that she told him of her conversation with Martin. In cross-examination Ms Francis merely mentioned that she told various people, including Francis, of her conversation with Martin, without giving the details of what she told him. In his re-examination, Francis merely said that he was living with his sister and that nightly during the week following his injury they would discuss the events of the day concerning his shoulder. In this state of the evidence I do not infer that Leisa Francis told Francis that Martin had told her that, if Francis was back playing in three weeks’ time, Souths would exercise its option over him for the 1999 season.

181 Even if Ms Francis relayed that promise to Francis, her doing so would not have perfected an offer or representation to Francis, because she was not Martin’s agent to communicate it to him. Martin had not asked her to act as a “go-between”. (Nor had Francis: indeed, he expressed annoyance over her having approached Martin.) An intention to make an offer, communicated to the proposed offeree by a third party without the intending offeror’s authority, cannot be accepted (cf Powell v Lee (1908) 99 LT 284; Gjergja v Cooper [1987] VR 167 (“Gjergja”) at 196-197 per Ormiston J; and see Carter and Harland, Contract Law in Australia (4^th ed, 2002) at [217]).

6. Martin’s alleged statement to Francis on or about Saturday 30 May 1998

182 According to Francis’s affidavit, several days after 27 May 1998, Martin told him that Leisa Francis had telephoned him. That would have been on or about Saturday 30 May 1998. According to Francis’s affidavit, the conversation was as follows:

[Martin] “Your sister rang me about your injury. I told her though it is not her business that if you want a contract with the Club next year be on the paddock in three weeks.” (my emphasis)

[Francis] “She had no right to ring you. It is none of her business.”

I accept that on or about 30 May 1998 Martin said the words which Francis attributes to him: “if you want a contract with the Club next year be on the paddock in three weeks”. But the words attributed to Martin are a threat, not a positive promise. If, contrary to this view, they are promissory, Martin intended them to be a pledge of his support for the retention of Francis and Francis could only have reasonably understood them as such.

7. Keenan’s telephone conversation with Cookson on or about 22 June 1998 and
Keenan’s letter following

183 In his affidavit, Keenan testified that on or about 22 June 1998 he and Cookson had a telephone conversation as follows:

[Cookson] “The Club is not going to exercise its option over Michael Francis pursuant to his contract. We would like to negotiate a lesser sign-on fee. [In the witness box Keenan said that rather than the last sentence, Cookson said ‘We’re happy to discuss a lesser figure.’] ”

[Keenan] “So you are interested in re-signing him?”

[Cookson] “We are but with a lesser sign-on fee and a greater incentive fee. [In the witness box Keenan said that rather than this, Cookson said ‘We’re happy to discuss a lesser figure.’]” (my emphasis)

184 In accordance with his usual practice, Keenan made a contemporary file note. It read:

“22/6 P/C to Frank

– Club not exercising option. You happy to talk about a lesser figure. I’ll confirm this in writing.” (my emphasis)

185 Cookson denied saying: “We are but with a lesser sign-on fee and a greater incentive fee”. Rather, Cookson says his response to Keenan was:

“Souths would [orally, Cookson said he probably said “might” rather than “would”] be prepared to enter into discussions regarding possible new terms for Mick.” (my emphasis)

186 Shortly afterwards, Keenan telephoned Francis and told him that he had just spoken to Cookson who had said that Souths was not going to exercise its option:

“because of the high sign-on fee, but wished to re-sign [him] with a lesser sign-on fee and a higher incentive.” [In the witness box, Keenan said that rather than “but wished to re-sign”, Cookson said “but were interested in re-signing”.]

187 According to Keenan’s affidavit, Francis replied:

“I thought that would happen now that the ARL and Super League war is over. How much does he want to pay as a sign-on fee?” (my emphasis)

Keenan told Francis that he did not know but said he would write to Cookson. Keenan wrote a diary note recording simply that he had informed Francis of the conversation with Cookson, without purporting to summarise it.

188 On 26 June 1998 Keenan wrote to Cookson as follows:

“I refer to the above matter and to our telephone conversation on 22 June 1998.

I confirm your verbal advice that the Club would not be exercising its option over Michael for the 1999 season and that the Club would be prepared to discuss a lesser figure.

Please advise by return facsimile prior to 5.00 pm on Tuesday 30 June 1998 if this is not the case.” (my emphasis)

Cookson did not reply to Keenan’s letter because he thought it satisfactorily summarised their conversation.

189 Both Keenan and Cookson were cross-examined in relation to the above events. Keenan said that at the time of his conversation with Cookson he believed Francis would be re-signed, and that he believed this because of what both Martin and Cookson had previously said to him. He said that at no time did Cookson put “a lesser figure” to him or he to Cookson. He said, however, that he expected that the next step to occur would be that he and Cookson would sit down and have a negotiation over terms for Francis for the 1999 season.

190 Cookson said that as at 26 June 1998 he thought there was only a slim chance of Souths wishing to negotiate a contract with Francis for 1999. An important reason was to be found in the growing pool of available players due to the end of the “war” between the “Super League” and the Australian Rugby League.

191 It is clear that Cookson informed Keenan unequivocally on 22 June 1998 that Souths would not be exercising its option and that Keenan promptly conveyed this information to Francis. Neither Francis nor Keenan protested to Cookson or to anyone else, then or later, that Souths had already, through Martin, exercised the option, or made a commitment that Souths would exercise it. Indeed, as noted at [32] since 27 May 1998 Keenan had expected that Souths would not exercise the option, and, as appears above, on being told by Keenan what Cookson had said to him, Francis said that he “thought that might happen”. The ready acceptance by Francis and Keenan of what Cookson had said supports my finding that Martin had not purported to exercise the option or to commit Souths to do so, and that neither Francis nor Keenan understood him to have done either of those things.

192 In my view, the best evidence of what was said by Cookson to Keenan on 22 June 1998 is found in Keenan’s file note and letter, the latter acquiesced in by Cookson. Cookson had said nothing more positive than that Souths was “happy to talk about a lesser figure” (file note) and “prepared to discuss a lesser figure” (letter). This is not the kind of statement Cookson would have made if he had thought that Souths was already contractually committed to Francis for 1999 and bound to attempt to agree upon a figure with him. Cookson was intending to convey new information consequential upon the non-exercise of the option: that Francis should not necessarily regard the door as closed as there remained the possibility of a contract at a lesser figure to be negotiated. The position so conveyed by Cookson was inconsistent with the existence, not only of a promise or representation that Souths would exercise the option, but also with the existence of any other kind of promise or representation that Souths would re-sign Francis. In my opinion, Francis and Keenan knew, or ought to have known, from 22 June 1998, that Souths did not regard itself as bound to engage Francis for 1999 at all. Cookson’s words showed that he regarded negotiations as totally open, rather than being merely limited to the amount and form of fees to be paid by Souths to Francis.

193 Francis testified that it was not until after he saw Souths’ list of players for 1999 on or about 7 November 1998 and Keenan obtained confirmation from Cookson that Souths did not want him for the 1999 season, that he protested to Cookson (at the Charing Cross Hotel) that Martin and Coleman had assured him that he would be re-signed. On the assumption that Francis did protest in those terms to Cookson (Cookson denies that he did) Francis’s failure to protest until 7 November 1998 or a few days later, and the lack of any protest at all by Keenan, is evidence that neither of them regarded Souths as already bound.

8. Telephone conversation between Keenan and Coleman in late July 1998 (following Round 20)

194 Keenan’s affidavit testimony is that he had a telephone conversation with the new caretaker First Grade coach, Coleman, as follows:

[Keenan] “Cookson told me that the Club wants to re-sign Michael Francis at a lower sign-on fee and greater incentive [orally Keenan said he wished to replace this sentence with: “Cookson told me that the Club is happy to discuss a lesser figure for Mick”] but I haven’t managed to tie him down to discuss the figures.”

[Coleman] “Tell Michael not to worry. I love Mick. Whilst I am at Souths, Michael Francis [orally Keenan said he wished to substitute “Mick” for “Michael” and “Michael Francis”] will be at Souths.”

Keenan did not make a note of the conversation but said in cross-examination that he remembered it “vividly”. Keenan says he telephoned Francis and relayed to him what Coleman had said, stating to Francis, “whilst he is at the Club, you will be at the Club”.

195 Coleman denied saying any of the words attributed to him by Keenan in the second paragraph quoted above.

196 I need not resolve the conflict between Keenan and Coleman and I am prepared to assume that Coleman made the statement attributed to him by Keenan. Coleman’s alleged words do not, however, assist Francis. First, their vagueness and personal nature are such that it could not reasonably be understood that Coleman was purporting to commit Souths to a promise to retain Francis as a player for as long as Coleman was “at Souths”. Nor could it be reasonably understood that Coleman was making a representation on behalf of Souths that Souths “would” or “intended to” retain Francis for such an indefinite period. At most, it could be reasonably understood that Coleman was making a personal statement, that is to say, a statement on his own behalf alone, that as long as he remained at Souths, he would support the retention of Francis. In terms of subs 84(2) of the TP Act (set out at [281] below) Coleman did not make the supposed statement “on behalf of” Souths.

197 Secondly, as noted earlier, caretaker coach Coleman, like coach Martin before him, had no actual or ostensible authority to commit Souths to a promise or representation of the kind mentioned.

198 Thirdly, I am not satisfied for the reasons given earlier, that Francis believed that a coach was able, without reference to the Retention Committee or Cookson, to commit Souths to engage a player.

199 Fourthly, in the absence of any reference to terms and, in particular money, the supposed statement does not support a promise or representation that Francis would be retained on the terms of the option or on any other terms which could support a legal obligation on the part of Souths.

200 Fourthly, I am not persuaded that Francis acted to his detriment in reliance in any way on what Coleman is alleged to have said. Francis had already decided to defer surgery and to continue playing. If the supposed assurance was given by Coleman in late July, as alleged, Francis played only one more match (Round 21, 31 July–2 August) before deciding to cease playing and to undergo surgery. Playing that one further match is not a significant detriment.

causes of action

201 Many of my findings and conclusions earlier clearly signify that Francis cannot succeed on some of his pleaded causes of action, but I will now refer to all of them in turn.

1.1 Breach of implied contractual duty of Souths to act reasonably and in good faith towards Francis when requiring or selecting Francis to play, or giving him orders relating to training or playing (Pleading, pars 2-4)

202 The Pleading refers to a duty to act both reasonably and in good faith and to Souths having acted both unreasonably and in bad faith by selecting and ordering Francis to play after 24 May 1998 until the conclusion of the 1998 season in the circumstances pleaded (see [8] above). It is convenient to say at once that in my opinion the evidence does not establish that Souths acted unreasonably or in bad faith.

203 The Australian authorities in relation to the existence of an implied contractual duty, or implied contractual duties, to act reasonably and in good faith in the performance of contractual duties and the exercise of contractual rights have been recently reviewed by Tyrone M Carlin in “The Rise (and Fall?) of Implied Duties of Good Faith in Contractual Performance in Australia” (2002) 25 UNSWLJ 99. The learned author draws attention to the confusion as to whether those authorities and dicta which support the implication of a contractual term in the present context, imply one of objective reasonableness or one of subjective good faith, or both, or an amalgam of the two. No doubt the same facts may show both objective unreasonableness and subjective bad faith. (For a relevant authority decided since the writing of Mr Carlin’s article, see Telstra Corporation Ltd v Optus Network Pty Ltd [2002] FCAFC 296 at [112]–[113].)

204 In written submissions Francis dwelt on the claimed “unreasonableness” of Souths’ conduct in requiring him to continue playing. There is no suggestion in those submissions that Souths acted in bad faith by, for example, acting capriciously or for a purpose extraneous to the contract, and the particulars given in the Pleading (summarised at [8] above) are entirely appropriate to a claim of unreasonableness.

205 The starting point for a consideration of a claim based on implied terms is the express terms. The relevant express terms of the 1996 Playing Contract were set out at [134] earlier. Under cll 3(a) and (d) of that Contract, Francis undertook to play “whenever and wherever reasonably required” and to “obey all reasonable directions of [Souths] relating to training for and playing the Game”. Under cl 7, where, in the reasonable opinion of Souths, Francis would be exposed to a greater than usual risk to his health or to a greater than usual risk of injury by playing because of his physical or mental condition, Souths was entitled to terminate the contract by payment to Francis of all monies due to him pursuant to the contract at the date of termination. By cl 20 Francis undertook to report immediately any injury he suffered to Souths’ “Medical Officer” (at the time, Dr McDonald) and to carry out his reasonable instructions.

206 There is a difference between an implied contractual duty of Souths to act reasonably (and not unreasonably) which would be breached by the giving of an unreasonable direction, and a condition that Francis was bound to obey only reasonable directions. The former, which the Pleading asserts, can form the basis of an action for damages for breach of contract by Souths; the latter cannot do so, and serves only to distinguish between what will and will not constitute the basis of a breach of contract by Francis.

207 The Pleading asserts that the present duty is implied by cll 3(a), 3(d) and 10(3)(f) of the 1996 Playing Contract and by law. Contrary to Souths’ submission, the allegation cannot be regarded simply as an allegation of breach of cll 3(a) and (d), because cl 3 imposes a duty on Francis, not on Souths.

208 I am content to assume, without deciding, that Souths owed Francis implied contractual duties to act both reasonably (and not unreasonably) and in good faith when requiring or selecting him to play, and when giving him orders relating to training and playing, as alleged in par 3 of the Pleading. It is not disputed that Souths did require Francis to resume training and playing after a three week respite.

209 The breach pleaded is that following the injury to Francis on 24 May 1998, Souths required Francis to resume playing (after three weeks) and to continue playing until the end of the 1998 season in the following circumstances:

(1) Souths failed to have regard to the recommendation of Dr Gibbs that Francis undergo surgery immediately;

(2) Souths failed to have regard to Francis’s state of health in determining his obligation to play to the best of his ability or at all; and

(3) Souths threatened or represented that it would re-sign Francis for the 1999 season only if he continued playing with his injury and deferred his AC joint reconstruction until after the 1998 playing season.

210 If Souths’ direction to Francis to play was unreasonable, Francis was not obliged to obey it, but this does not mean that an implied obligation on Souths to give only reasonable directions, that is, no directions other than reasonable ones, would be without effect. The mere giving of the direction might lead to harm to Francis because he might have forgotten that the 1996 Playing Contract obliged him to obey only reasonable directions, or he might be reluctant to insist on his contractual rights and to force a confrontation with Souths, or he might not be sufficiently confident that Souths’ direction was unreasonable.

211 I will consider now the three particulars mentioned.

(1) Souths failed to have regard to the recommendation of Dr Gibbs that Francis undergo surgery immediately

212 The first doctor Francis consulted was Souths’ Medical Officer, Dr McDonald. Of the various doctors who became involved with Francis, only Souths’ Medical Officer had a role recognised in the 1996 Playing Contract (see cl 20 set out at [134] earlier). In fact, Dr McDonald first saw Francis in relation to his injury at Marathon Stadium during the match against the Newcastle Knights in which he sustained the injury. (Francis noted in his affidavit that he had reported to Dr McDonald in accordance with his contractual obligation.) Although there are some differences between Francis and Dr McDonald as to what was said, it is common ground that Dr McDonald recommended non-surgical treatment and an early return to the field; deferral of consideration of the question of surgery until after the end of the 1998 season; and, in the meanwhile, the use of painkilling injections as necessary. It is also common ground that Francis had misgivings about Dr McDonald’s recommendation, and that Dr McDonald agreed to refer him to Dr Biggs for a second opinion. Dr McDonald says that Francis’s express reason for wanting to have immediate surgery was a cosmetic one. He said that Francis explained his preference as follows:

“Look at my shoulder Doc. I will look like a spastic when I take my shirt off at DCM’s.”

Dr McDonald explained in his testimony that DCM’s was a nightclub and said that he had heard other players talking about taking their shirts off when inside that nightclub. In his letter of referral to Dr Biggs, Dr McDonald stated:

“He [Francis] wants surgery for cosmetic reasons. I have explained that as a rule he could return to sport earlier with conservative [treatment] and have the surgery at the end of the year.

Thanks for your opinion.”

213 Dr Gibbs agreed in cross-examination that when Francis saw him on Monday 25 May 1998, Francis’s “overwhelming concern was the cosmetic appearance of his shoulder”. In fact, Dr Gibbs’ notes of the consultation recorded only that Francis had sustained a Grade III AC left shoulder joint dislocation, that he wanted surgery “to improve cosmetics”, and that he was to see Dr Biggs.

214 Apparently, Francis also told Dr Biggs on 26 May 1998 that he was “not happy with the look of his shoulder” and was “keen to proceed to surgery”. Dr Biggs wrote a report to Dr McDonald on that date to that effect, which is referred to at [222] below.

215 Francis denies saying the words which Dr McDonald attributes to him. He acknowledges that his “protruding shoulder” was one of his concerns, but said that of greater importance was the issue of permanent further damage to, and the pain in, his shoulder.

216 Although it may not be important, I accept Dr McDonald’s testimony on the point. The statement he attributes to Francis is specific, striking and unlikely to be “misremembered”. Moreover, it is consistent with what Dr Gibbs, called as a witness by Francis, appreciated to be Francis’s “overwhelming concern”, and with what Francis apparently told Dr Biggs. I find that Francis was much concerned with the cosmetic aspect of his injury.

217 Francis had often consulted Dr Gibbs for “second opinions”. In his affidavit, Dr Gibbs said he advised Frances as follows:

“Michael with this sort of injury you may be able to continue playing with physiotherapy and painkillers. Although there is no real risk of further injuring the shoulder, if the operation is done straight away the shoulder then has the best chance of healing and it will reduce or remove the disfiguring appearance. Also because of the pain of the injury, and the limitation it will place on you training particularly your weight training, it will increase the chance of you incurring other injuries as your fitness may deteriorate. For these reasons I recommend you have an operation on your shoulder.”

and

“The injury from a functional point of view may not require surgery, but if you continue to play football you would not be able to lift weights with your shoulder or do other modes of training, and you would certainly not be able to tackle or have physical contact with the shoulder without painkilling injections. However, if you have the operation now you will not be able to play football for the rest of the 1998 football playing season as the recovery time is about 12 weeks, but you will be well and truly recovered for next year’s pre-season.”

Dr Gibbs said that Francis replied:

“I do not want to increase the risk of other injuries and want to improve the cosmetics appearance. To play with painkillers is not playing at peak fitness. I would like to have the operation now.”

218 In cross-examination Dr Gibbs volunteered that “playing with painkillers for the club is something that lots of professional football players do and they put their club first in many respects ...”. He agreed with a written statement in a report by Dr Biggs that “Overall the results of early operative intervention are better than a later reconstruction, even though 80% of grade III AC joints do settle with conservative treatment” (see [222] below). He also accepted that “No-one can make someone take a painkiller. It has to be the player’s choice.” Dr Gibbs testified in cross-examination that he was the Medical Officer of the Manly Club in 1998 and 1999 and had used painkillers to enable Terry Hill to play for that Club throughout those two seasons, although he had had an AC joint dislocation like that of Francis. His cross-examination continued as follows:

“There was nothing dangerous at all in that procedure being employed was there? – No, the A-C joint is very amenable to using painkillers.”

In re-examination Dr Gibbs said Terry Hill played for Manly as an outside centre. Perhaps I am expected to take judicial notice of the fact that the position of outside centre does not usually involve as much body to body contact as the position of a front-row forward. I do not do so. The matter was not taken further in re-examination and I attach no importance to it.

219 Pearce testified that, depending on the player, the nature of the injury and the medical advice, professional footballers sometimes continue playing, carrying an injury. In addition to Terry Hill already mentioned, Paul McNicholas of Souths suffered a left AC joint sprain according to Dr McDonald’s “injury list” of 25 May 1998, but continued to play throughout the 1998 season. He was noted by Dr McDonald on 28 August 1998 as a player who was to have surgery at the end of the season. (I note that Mr McNicholas secured a contract for 1999.) But Pearce is plainly correct in saying, in effect, that whether a particular player should play on depends on all the circumstances of the individual case.

220 In my opinion, the first particular of unreasonableness and bad faith is not made out. First, Dr Gibbs did not make a recommendation to Souths. He communicated his advice and his supporting reasons orally to Francis alone. There is no evidence that this “second opinion”, which Francis took it upon himself to obtain from Dr Gibbs, now relied on by Francis as being inconsistent with the views of Dr McDonald, was ever pressed upon Souths or Dr McDonald in order to demonstrate that Dr McDonald’s opinion was unreasonable or procure a revocation of the direction to continue playing. The most that can be said is that Francis told Martin on 25 May 1998 that Dr Gibbs had recommended that he have surgery immediately, and produced to the coach the X-rays of his shoulder. The only written communication of the fact of Dr Gibbs’ recommendation occurred well after the event in a letter written for a different purpose on 2 November 1998, when Dr Gibbs informed Cookson incidentally that he had recommended to Francis that he have an AC joint reconstruction immediately following his injury. In the circumstances of only an informal mention of Dr Gibbs’ recommendation by Francis to Martin, the supposed duties of reasonableness and good faith did not require Souths to question the opinion of its Medical Officer, Dr McDonald, or require Souths or him to seek out medical opinion inconsistent with his own opinion, particularly in view of his status under the 1996 Playing Contract.

221 Secondly, even if Souths had been obliged to “have regard to” Dr Gibbs’ recommendation to Francis that he undergo surgery immediately, Souths would also have been entitled to “have regard to” other medical evidence before it. In particular, it would have been entitled to have regard to the opinion of Dr McDonald, its own Medical Officer, which favoured non-surgical treatment with a review of the position after Francis had played out the season.

222 Souths would also have been entitled to have regard to the opinion of Dr Biggs. Dr McDonald testified that Dr Biggs, who was not called as a witness, told him that he had advised Francis that he had a good chance of recovery without surgery and that he (Dr Biggs) could not promise Francis a better outcome with surgery. Dr Biggs wrote a letter to Dr McDonald on 26 May 1998 stating:

“I discussed with him his various treatment options. He is not happy with the look of his shoulder, and he is keen to proceed to surgery.

Overall the results of early operative intervention are better than a late reconstruction, even though 80% of grade III AC joints do settle with conservative treatment.

He is keen to have a reconstruction, and to this end I will arrange for him to undergo his procedure in the not too distant future.” (my emphasis)

223 Thirdly, even accepting every word of Dr Gibbs’ testimony recounted above, I am not satisfied that it was unreasonable for Souths to direct Francis to resume playing after three weeks off. According to Dr Gibbs, continuing to play with physiotherapy and painkillers would not put Francis’s shoulder at real risk of further injury, and that was the very course he had implemented for Terry Hill. According to Francis, Martin’s direction that Francis keep playing was given by reference to the course that Dr Gibbs had directed for Terry Hill.

224 In sum, as a medical matter, more than one course was reasonably open and supportable, and it can not be said on the evidence before me that the course recommended by Dr McDonald was unreasonable.

225 Martin’s initial direction to Francis to resume playing in three weeks’ time was given reasonably and in good faith, although he did not have available at the time all the medical evidence which became available later. Souths adhered to Martin’s direction reasonably and in good faith, relying on the reasonable advice of its Medical Officer, Dr McDonald.

(2) Souths failed to have regard to Francis’s state of health in determining his obligation to play to the best of his ability or at all

226 What I have said above in relation to particular (1) seems to deal adequately with this particular, which is ill expressed. If the particular is intended to signify that the fact that Francis thought it desirable following Round 21 to cease playing demonstrates unreasonableness or bad faith or both at the much earlier time when the direction to resume playing after three weeks was given, I do not agree.

(3) Souths threatened or represented that it would re-sign Francis for the 1999 season only if he continued playing with his injury and deferred his AC joint reconstruction until after the 1998 playing season

227 From Martin’s mouth the threat or negative representation was reasonably to be understood as a threat or negative representation that if Francis did not resume playing after a lay-off of three weeks, Martin would not want Francis in the First Grade team in 1999 and would recommend that Souths not retain him for that season – a recommendation which Souths would be likely to adopt.

228 For the reasons given above, Souths was entitled to require Francis to resume playing in three weeks’ time. Francis was obliged to comply with the requirement. The threat or representation, whether by Souths as described in the particular or by Martin as just described by me, was of a kind calculated to ensure that Francis did that which he was already contractually bound to do, and cannot be characterised as unreasonable or as an indication of bad faith.

229 I do not think that the third particular of unreasonableness and bad faith is made out either.

230 For the above reasons the pleaded breach of implied terms of the 1996 Playing Contract is not established.

1.2 Breach of contract made in or about May to July 1998 that Souths would re-sign Francis for the 1999 season on the terms contained in the option provision in the 1996 Playing Contract or on such other terms as Francis was prepared to agree to (Pleading, pars 5-8)

231 The pleaded particulars of the Contract for the 1999 Season are as follows:

“The Contract for the 1999 Season was express or partly express or [sic – and] partly implied:

(a) in so far as it was express it was entered into orally on or about 25 May 1998 between the Applicant and Steve Martin who was at the time the coach of the Respondent’s first grade team;

(b) in so far as it was implied the implication arose:

(i) by reason of the actions of the Respondent’s new coach in about June 1998, Craig Coleman, knowingly allowing the Applicant to play the Game with a dislocated A-C joint during the 1998 playing season;

(ii) by reason of the Respondent not correcting a letter written by the Applicant’s Manager, Greg Keenan, to the Respondent’s Operation Manager on 26 June 1998 in which Greg Keenan confirmed his understanding that the Respondent was willing to re-sign the Applicant for the 1999 playing season for a lesser sign on fee than provided under the option clause in the 1996 Playing Contract;

(iii) to give business efficacy to the promise by the Respondent to re-sign the Applicant in the 1999 playing season in circumstances in which it was so obvious that it goes without saying;

(iv) [from] [t]he oral statement by Craig Coleman to Greg Keenan in about the end of July 1998 that Keenan should tell the Applicant not to worry and that whilst Coleman was at Souths the Applicant will be at Souths.”

232 It will be recalled (see [9]) that the Contract for the 1999 Season was that Souths would re-sign Francis for 1999 on:

(a) the terms of the option in the 1996 Playing Contract; or

(b) “such terms as [Francis] was prepared to agree to”.

233 Alternative (a) presents no conceptual difficulty: it refers to the terms on which the option for 1999 might have been exercised by Souths by 31 August 1998. The second alternative is, however, conceptually problematical. It suggests offerings of terms by Souths until terms were offered which Francis was “prepared to agree to”. This was an agreement upon such terms, including such terms as to playing and match fees, as Souths was prepared to offer and Francis was prepared to accept.

234 Such a “contract” is illusory. Under the pleaded contract, it cannot be said of any set of terms Souths might offer, that Francis would not be entitled to reject them. There is not pleaded, for example, any constraint of reasonableness, or any mechanism for resolution by a third party of a failure to agree. In the result, it would be within Francis’s unfettered discretion whether he would ever become bound. Accordingly, there is no consideration for Souths’ supposed promise. Of the many authorities that could be cited to support my conclusion of illusoriness, it suffices to mention Loftus v Roberts (1902) 18 TLR 532; Beattie v Fine [1925] VLR 363; Stocks & Holdings (Constructors) Pty Ltd v Arrowsmith (1964) 112 CLR 646; Elibank-Murray v Dunne (1982) NSW Conv R §55-048. (It may be noted, in passing that Keenan expressed the opinion that, if Francis had not been prepared to accept any offer made by Souths, he “probably would have gone to the market place”.) I need not consider what the position would have been if the pleaded alternative form of Contract for the 1999 Season had been on such terms as one party should unilaterally determine, and, in particular, whether the position would have differed according to whether that party was Souths or Francis.

235 I will now address the pleaded particulars of the Contract for the 1999 Season set out above in turn.

(a) in so far as it [the Contract for the 1999 Season] was express it was entered into orally on or about 25 May 1998 between the Applicant and Steve Martin who was at the time the coach of the Respondent’s first grade team;

236 In so far as Francis relies on an express contract made with Martin, he fails for several reasons.

237 First, for reasons previously given, I am not persuaded that Martin made the promise in question.

238 Secondly, also for reasons previously given, Martin had neither actual nor ostensible authority to commit Souths contractually to Francis for 1999.

239 Thirdly, as explained earlier, neither Francis nor Keenan in fact understood that Martin had authority to make the contractual commitment in question. They knew that whatever the size of the risk, there was a possibility that Martin would be overruled, (and certainly a possibility that agreement on terms would not be reached).

240 Fourthly, it follows that they understood that Martin’s words should be understood and relied on as a pledge of his personal support, not as a commitment by Souths.

241 Fifthly, if Souths was otherwise bound by Martin’s alleged promise, it did not give rise to any contract because Francis did not give consideration for the promise. As explained earlier, the direction that Francis resume playing after three weeks was reasonable. It follows that Francis was bound by cll 3(a) and 3(d) of the 1996 Playing Contract to obey the direction (failure to obey it would have been “misconduct” and laid Francis open to charge and penalty, including dismissal, under cl 10 of that Contract). Since Francis was already contractually bound to resume playing in three weeks’ time, a promise by Martin of a contract for the 1999 season if Francis would do so would have been nudum pactum and not contractually binding on Souths. The only answer made by Francis to this line of reasoning is that it was in fact unreasonable for Souths to give him the direction, so that he was not bound to obey it – a submission which I have rejected. Francis does not rely on such cases as Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1 and Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723, which may be understood to have recognised an “exception” to the generality of the rule in Stilk v Myrick (1809) 2 Camp 317 (170 ER 1168). As there are other reasons why Francis fails, I have not thought it necessary to invite submissions from the parties on this question and will say nothing more of it.

242 Sixthly, if Souths made Francis an offer, he did not accept it. The pleaded promise by Martin is that Souths would re-sign Francis if he deferred surgery and kept playing in the 1998 season for as long as he could. This promise was of a nature apt to give rise to a unilateral contract: the act of acceptance called for would also be the executed consideration for the promise offered. Francis resumed playing in Round 15 on 20 June 1998 and learned two days later, on 22 June, that Souths was not going to exercise its option. Souths submits that by making that clear on 22 June, a considerable period of time before the required act of acceptance was complete, Souths revoked its supposed offer as it was entitled to do.

243 This submission raises the question whether it was it open to Souths to revoke its offer at a time when acceptance by Francis had barely begun and long before it was complete (see the discussion in Mobil Oil Australia Ltd v Wellcome International Pty Ltd (1998) 81 FCR 475 at 500-507). I do not find it necessary to answer this question.

244 There is another reason why acceptance did not occur. I am not convinced that by returning to the field for Round 15, Francis intended to accept any offer of a positive promise by Souths made through Martin. An act which is relied on as an acceptance must be responsive to the offer: R v Clarke (1927) 40 CLR 227 per Isaacs ACJ, per Starke J; Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424 at 456-457; Gjergja at 206, 208-211 per Ormiston J.

245 First, Francis said in cross-examination that Martin, and later his successor Coleman, “ordered” him to play. I accept that this evidence reflected Francis’s understanding in 1998 when he returned to the field: he chose to obey an order because obedience seemed to offer him more advantages than disadvantages. I note that Francis’s first contractual claim, breach of implied terms of the 1996 Playing Contract, assumes that Francis was “ordered” to play.

246 Secondly, Garlick testified in his affidavit that about a week before Francis resumed playing in Round 15 on the weekend of 20/21 June 1998, he and Francis had a conversation in Souths’ dressing room at Redfern Oval to the following effect:

[Francis] “What do you think I should do about my shoulder?”

[Garlick] “With these AC joint injuries you can wait forever for them to heal. I’ve had a few myself. I played with a needle and eventually it got better. The doctors told me that I couldn’t make it much worse by playing.”

[Francis] “I’ve decided to keep playing as well. If I can’t do myself any more damage, then I’ve got nothing to lose. I might as well keep playing and earn my match payments.”

[Garlick] “Sometimes the injury can get better by itself anyway. Mine have. You never know, you might get another injury which will force you to rest it and that will help. If it doesn’t get any better, you can always have the surgery later.”

[Francis] “That’s what I’ve decided to do. I’m going to keep on playing.”

247 In his affidavit, Francis denied having any such conversation with Garlick. Both men were cross-examined about the matter. I find it difficult to accept Francis’s claim in cross-examination that at no time did he speak about his injury to the Captain of his team. I accept that a conversation took place generally to the effect of that set out above and that Francis did not mention to Garlick his contractual position with Souths or any promise by Martin of a contract for 1999.

248 Thirdly, neither Francis nor Keenan protested following 22 June 1998, when Cookson made it clear that Souths did not regard itself as having engaged Francis for 1999, that Francis had returned to the field because of a promise made by Martin.

249 I think Francis took into account a range of circumstances in the course of reaching his decision to obey Martin’s direction, including the facts that a return to the field would:

permit him, rather than his replacement, to demonstrate his playing ability for the purposes of an engagement for the 1999 season;
allow him to earn match fees;
on all the medical opinions available to him, not cause further damage to his shoulder;
win, or at least not lose, the important support of coach Martin in connection with his being retained by Souths in what were to be the difficult market circumstances of the 1999 season.

I am not satisfied that Francis resumed playing and deferred surgery with the intention of accepting any offer by Martin of a contract for the 1999 season.

(b) in so far as it [the Contract for the 1999 Season] was implied the implication arose:

250 The conduct of Coleman described in this particular is not suggestive or probative of the pleaded Contract for the 1999 Season.

(b) in so far as it [the Contract for the 1999 Season] was implied the implication arose:

251 Souths did not respond to Keenan’s letter dated 26 June 1998 to Cookson. The text of that letter was set out at [188].

252 The letter does not support the particular. The words “would be prepared to discuss a lesser figure” fall somewhat short of “was willing to re-sign [Francis] ... for a lesser sign-on fee”. Being “prepared to discuss a lesser figure” does not suggest the existence of a contract for the 1999 season. On the contrary, it suggests that a contract for the 1999 season did not yet exist. The words “prepared to discuss a lesser figure” is shorthand for “prepared to discuss entering into a contract for 1999 but on the basis of a lesser figure”. A representation of preparedness to discuss entering into a contract for 1999 at a lesser figure, or even a promise to enter upon such a discussion, does not advance Francis’s case.

(b) in so far as it [the Contract for the 1999 Season] was implied the implication arose:

(iii) to give business efficacy to the promise by the Respondent to re-sign the Applicant in the 1999 playing season in circumstances in which it was so obvious that it goes without saying;

253 I have difficulty in understanding this particular. It assumes (inconsistently with my finding) the existence of a promise by Souths to re-sign Francis for 1999. The suggestion seems to be that the particular terms on which he was to be re-signed were implied in order to give business efficacy to the bare promise to re-sign. The problem is, then, that the particular is not of a circumstance from which the making of a contract is implied.

254 Moreover, the two sets of terms pleaded in the alternative do not exhaust the field of possibilities. Those two sets of terms are: (1) the terms of the option; (2) “such other terms as [Francis] was prepared to agree to”. A third possibility is terms providing for “reasonable remuneration” divided in a “reasonable” manner as between playing fee and match fees. No doubt this third possibility was not pleaded for good reason. But what matters for present purposes is that the two possibilities pleaded do not exhaust the field of possibilities. Therefore, I do not think that only the first or second possibility is required to give business efficacy to an assumed promise by Souths to re-sign Francis.

(b) in so far as it [the Contract for the 1999 Season] was implied the implication arose:

255 The supposed statement is not probative of the pleaded Contract for the 1999 Season. If Coleman proved to be at Souths until the end of the 1999 season, no shorter and no longer, that would be a fortuitous coincidence. Coleman’s comforting personal assurance was as consistent with the non-existence of the Contract for the 1999 Season as it was with its existence.

256 For the above reasons, the cause of action based on the Contract for the 1999 Season fails. (I find it convenient to address an issue of Francis’s election not to accept Cookson’s words to Keenan on 22 June 1998 as a repudiation below at [340]–[342] under “Loss or Damage”.)

257 Before passing from the Contract for the 1999 Season, I add the following observations.

258 There was an irony in the respective positions taken by the parties in their submissions as to the terms of the alleged Contract for the 1999 Season. Souths submitted that they were that Francis would be retained for the 1999 season on the terms of the option alone; that that supposed contract was repudiated (or if it was only an offer or representation, the supposed offer or representation was revoked or terminated) on 22 June 1998 when Cookson told Keenan that Souths would not be exercising its option; and that from that time Francis was under no misunderstanding as to Souths’ position, so that responsibility for the “delay” of surgery from then to 11 September 1998 is not something for which Souths is responsible. It is ironic that, if accepted, this submission would at least overcome the illusoriness problem associated with the alternative form in which Francis pleads the Contract for the 1999 Season.

259 Francis, on the other hand submits that his primary case is that the Contract for the 1999 Season was not on the terms of the option at all. In oral submissions, senior counsel for Francis said:

“the representations made by Martin to Francis and Keenan in May were simply to re-signing him and didn’t refer to the option at all. The only time the option got a mention was in the representation made to Leisa Francis.”

Consistently with the submission, senior counsel then added to numerous references in Francis’s written submissions to a promise to engage Francis on the terms of the option, a reference in the alternative to a promise to re-sign him on no particular terms. It is ironic that Francis’s primary case was a bare promise to re-sign on terms to be agreed in view of the associated problem of contractual illusoriness (in fairness to senior counsel for Francis, I should record that he referred to a promise on the terms of the option as the alternative way in which Francis’s case was put).

2. Breach of fiduciary duty (Pleading, pars 9-12)

260 Paragraphs 9 to 12 of the Pleading (summarised in [11] earlier) allege that Souths owed Francis a fiduciary duty which it breached by using its discretionary power under the 1996 Playing Contract to gain an advantage for itself to the detriment of Francis, and by acting unreasonably and in bad faith towards him. As particulars, the Pleading repeats, first, the pleaded breach of Souths’ alleged contractual obligation to act reasonably and in good faith. Secondly, the Pleading gives as particulars that Souths:

· gained for itself an advantage in having Francis available to play for it in the remainder of the 1998 season; and

· gained that advantage in disregard of Francis’s interests and to his detriment in that by his failing to have surgery until after the 1998 season, his performance and reputation would be diminished and he might be precluded from being available to play in the 1999 pre-season and therefore from entering into a contract for the 1999 season with Souths or with any other club.

In sum, it is claimed that, in the exercise of the discretionary power given to it by the 1996 Playing Contract, rather than acting single-mindedly in the interests of Francis as its fiduciary obligation required it to do, Souths preferred its own interests over those of Francis.

261 Francis’s submissions refer to Crabb v Arun District Council [1976] Ch 179 at 193 (“Crabb”) in support of the proposition that for the purposes of the equitable cause of action, Souths was bound by Martin’s promise or assurance. The passage in question occurs in the judgment of Scarman LJ and is as follows:

“The approach of equity ... will merely be that those to whom the defendant entrusts the conduct of negotiations must be treated as having the authority, which, within the course of the negotiations, they purport to exercise.”

But Souths did not entrust to Martin the conduct of negotiations with Francis in relation to a contract for the 1999 Season. In any event, the Contract for the 1999 Season is irrelevant to the pleaded case of breach of fiduciary obligation. It is not disputed that Souths “required or selected or ordered [Francis] to play the Game” three weeks after he sustained his injury. The references to Martin’s capacity to bind Souths and to Crabb are misconceived.

262 Did Souths owe Francis the fiduciary obligation as claimed?

263 Francis submits that the relationship between an employer and an employee is recognised in equity as being fiduciary in nature. In support he relies on the following passage from the judgment of Mason J in Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 (“Hospital Products”) (at 96):

“The accepted fiduciary relationships are sometimes referred to as relationships of trust and confidence…trustee and beneficiary, agent and principal, solicitor and client, employee and employer, director and company, and partners.” (my emphasis)

264 The manner in which the various relationships mentioned in this passage are set out suggests that, with the exception of that of partners (where the fiduciary obligation is mutual), the “trust and confidence” is reposed by the party second named in the party first named, so that the party first named owes the fiduciary obligation to the one second named (the point was noted by Master Bredmeyer in Chin v Minister for Education of Western Australia [2000] WASC 304 at [35]. So it is the trustee, agent, solicitor and director, not the beneficiary, principal, client or company, who owes the fiduciary obligation.

265 In other cases too it has been recognised that a fiduciary obligation may be owed by an employee, at least a senior employee, to his or her employer (cf Reading v Attorney General [1951] AC 507 at 517 per Lord Normand; Timber Engineering Co Pty Ltd v Anderson [1980] 2 NSWLR 488; Angus & Coote Pty Ltd v Render (1989) 16 IPR 387; State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (unreported, Sup Ct of NSW, O’Keefe CJ in Comm D, 14 September 1994); Colour Control Centre Pty Ltd v Ty (1996) 39 AILR §5-058 (Santow J) at 4,318-4,320; EFG Australia Ltd v Kennedy [1999] NSWSC 922 (Hodgson CJ)). It does not follow, however, that employers owe a fiduciary obligation to their employees. This is not to say that no employer can ever owe a fiduciary obligation to its employee. However, as will appear below, in my opinion, there are no circumstances of the present case to support the imposition of a fiduciary obligation on Souths in favour of Francis.

266 As was noted by Frankfurter J, writing on behalf of the United States Supreme Court, in Securities and Exchange Commission v Chenery Corp 318 US 80 (1943) at 85-86 (cited with approval in Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165 (“Pilmer”) at [77]), to classify a relationship as fiduciary “only begins analysis”. In the present case the most fruitful inquiry is to ask whether Souths owed a fiduciary dutyof the particular kind pleaded, and, if so, whether Souths breached that duty.

267 In support of the existence of the pleaded fiduciary duty Francis relies on Hollingsworth v Commissioner of Police (1998) 47 NSWLR 151 and Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144 in which it was accepted that there is implied in every employment contract a term that the employer will not, without reasonable and proper cause, act so as to destroy or seriously damage “the relationship of confidence and trust” that exists between employer and employee, and that the employee has a corresponding duty to act with fidelity and good faith (cf Hollingworth at 190; Burazin at 146-147, 151). But an implied contractual term of that kind is not to be equated with a fiduciary obligation: see Nottingham University v Fishel [2000] ICR 1462 at 1492-1493. Mutual trust and confidence may characterise a fiduciary relationship, but are not sufficient, without more, to give rise to one. In News Limited v Australian Rugby League Football Ltd (1996) 64 FCR 410 at 539-540, this Court noted that the notion of mutual trust and confidence may be more significant in establishing a fiduciary relationship between “collaborative” parties who are related to one another “horizontally”, such as joint venturers or partners, than between parties who are related to one another “vertically”, such as employer and employee.

268 As Mason J pointed out in Hospital Products (at 96–97):

“[t]he critical feature of [fiduciary] relationships is that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person”

(referred to with apparent approval in Pilmer at [70]; and cf Meagher, Gummow and Lehane, Equity: Doctrines and Remedies (3^rd ed, 1992) at 130). It is the lack of this “critical” undertaking by Souths to act “for or on behalf of or in the interests of” Francis with respect to the matters pleaded that signifies that Souths was not a fiduciary in its relationship with Francis.

269 Francis has not established that Souths either expressly or implicitly undertook to act in his interests when deciding whether to give him a reasonable direction to play. On the contrary, the terms of the 1996 Playing Contract suggest that subject to their several references to reasonableness, Souths was entitled to act in its own interests in preference to the interests of Francis. In Hospital Products, Mason J noted (at 97):

“That contractual and fiduciary relationships may co-exist between the same parties has never been doubted. Indeed, the existence of a basic contractual relationship has in many situations provided a foundation for the erection of a fiduciary relationship. In these situations it is the contractual foundation which is all important because it is the contract that regulates the basic rights and liabilities of the parties. The fiduciary relationship, if it is to exist at all, must accommodate itself to the terms of the contract so that it is consistent with, and conforms to, them. The fiduciary relationship cannot be superimposed upon the contract in such a way as to alter the operation which the contract was intended to have according to its true construction.”

Clauses 3(a) and 3(d) of the 1996 Playing Contract provided that Francis would play the Game for the Club “whenever and wherever reasonably required” and would “obey all reasonable directions of the Club relating to training for and playing the Game”. The course of dealing between Souths and Francis exhibited no deviation from the terms of the 1996 Playing Contract.

270 The imposition of a fiduciary obligation in the terms suggested by Francis would require the conclusion that Souths must exercise its power to give a reasonable direction to Francis to continue playing, in his interests in preference to its own. The supposed fiduciary duty would apparently require that Souths explore the possibility of alternative reasonable directions which it might give Francis and which might further his interests, albeit to the disadvantage of Souths’ own interests. Such a result could hardly have been intended by either party.

271 The pleaded fiduciary duty did not arise.

272 Even if the alleged fiduciary obligation existed and was breached, nonetheless, in my opinion, it is not established that Souths’ direction that Francis resume playing after three weeks off placed him in a worse position than if he had undergone surgery immediately –my reasons are given under “Loss or Damage” below.

3. Contravention of the TP Act (Pleading, pars 13-16)

273 (For convenience, I will not refer to the FT Act since the provisions of that Act mirror those of the TP Act.)

274 The positive and negative Representations allegedly made in May 1998 are found in par 13 of the Pleading (see [12] earlier) and the Representation allegedly made by Coleman to Keenan in late July 1998 is found in par 13A of the Pleading (see [13] earlier).

275 The first two Representations are said to have been express or partly express and partly implied. In so far as they were express, they are said to have been made orally by Martin – on 25 May 1998 to Francis and on 26 May 1998 to Keenan.

276 Of the first two Representations, the first (negative) Representation is not shown to have been misleading or deceptive: so far as the evidence reveals, if Francis had insisted on having immediate surgery, Martin would have recommended that he not be retained for 1999 and the Retention Committee would have accepted his recommendation. I need not concern myself with the first Representation further.

277 For reasons given earlier, I am not satisfied that Martin made the second (positive) Representation to Francis or to Keenan.

278 As noted at [12] earlier, in so far as the positive Representation was implied, it is said to have been implied by four circumstances. The first three are those numbered (i), (ii) and (iv) as the circumstances said to have given rise by implication to the Contract for the 1999 Season. In my opinion the positive Representation does not arise from those circumstances. My reasons are, in substance, those I gave earlier for concluding that those circumstances did not give rise to the Contract for the 1999 Season.

279 The fourth particular of the circumstances from which it is said that the positive Representation arose is that on 22 June 1998 Cookson told Keenan that Souths was not exercising its option over Francis for the 1999 season but would be prepared to discuss a lesser figure for that year. This circumstance does not imply the positive Representation either. Moreover, upon reflection, I do not think that this particular, which I allowed to be added by amendment on the hearing over objection, is a proper particular of the positive Representation, since the positive Representation is alleged in the Pleading to have been made “in or about May 1998” and to have induced Francis to continue to play the Game for Souths after 24 May 1998.

280 (I note, in passing, that it was not pleaded that Souths, through Cookson, engaged in misleading or deceptive conduct on 22 June 1998 by representing that Souths “would be prepared to discuss a lesser figure” when it was not. Therefore I will not indicate the reasons why I think such a case would have failed.)

281 I turn now to the question of Souths’ responsibility under the TP Act for the positive Representation if, contrary to my finding, it was made. Subsection 84(2) of the TP Act provides as follows:

“Any conduct engaged in on behalf of a body corporate:

(a) by a director, servant or agent of the body corporate within the scope of the person’s actual or apparent authority; or

(b) by any other person at the direction or with the consent or agreement (whether express or implied) of a director, servant or agent of the body corporate, where the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the director, servant or agent;

shall be deemed, for the purposes of this Act, to have been engaged in also by the body corporate.”

This provision is relevant to all the causes of action under the TP Act.

282 Martin was not a director of Souths. If the CS Agreement was operative, he was not a servant or agent of Souths either. I proceed on the basis that, if the CS Agreement was not operative, he was a servant of Souths but only as Head Coach and coach of the First Grade team. The giving of the alleged promise or assurance was not conduct within the scope of the actual or apparent authority of such a person. And, the giving of that promise or assurance was not conduct within the scope of the actual or apparent authority of any director, servant or agent of Souths at whose direction or with whose consent or agreement the promise or assurance was allegedly given by Martin.

283 Section 84(2) does not, however, purport to be an exhaustive statement of the circumstances in which conduct is to be treated as engaged in by a body corporate for the purposes of the TP Act. It has not been disputed that it was within the authority of Martin, as Head Coach and coach of the First Grade team, to direct Francis to resume playing after a lay-off of three weeks. If, contrary to my finding, he added words to the effect, “and if you do, Souths will give you a contract for the 1999 season”, I do not see why that representation would not have been made in the course of the performance of his duties as Head Coach and coach of the First Grade team, even though it was not within the scope of his “actual or apparent authority” to make that particular representation.

284 I need not decide whether this circumstance would have sufficed to render Souths answerable under the TP Act for Martin’s supposed positive Representation because Francis did not in fact rely on it as a representation binding on Souths. As found earlier, he understood that it remained for Martin to “get his way” with the Retention Committee and Cookson; that therefore there was at least some risk he might not do so; and that therefore Martin’s words could at most be a pledge of his personal loyalty to Francis in seeking to have him retained for 1999. Francis understood that negotiation of deals with players was Cookson’s function, not Martin’s. The most that can be said is that he understood that Martin had always got what he wanted from Souths. Francis may have thought that, if he returned to the field as directed by Martin, it was a “safe bet” that Martin would manage to ensure that Souths would give him a contract for 1999. But in that state of mind, he was relying on his own assessment of the risk, not a representation by Souths, and cannot recover damages from Souths under the TP Act. Francis’s state of mind prevents a conclusion that any misleading or deceptive conduct of Souths caused him to follow the course he did and to suffer any resulting loss or damage.

285 I turn now to the third Representation – the one alleged to have been made in late July 1998 orally by Coleman to Keenan. The third Representation is:

(a) that Francis should not be worried about a contract with Souths for the 1999 season; and

(b) that while Coleman was with Souths, Francis would be with Souths.

286 In so far as Francis’s claim of misleading or deceptive conduct is based on the third Representation, it fails for several reasons. First, as explained earlier, if made, the statement was not properly understood, or in fact understood, as anything other than a statement by Coleman on his own behalf rather than on behalf of Souths.

287 Secondly, for the reason just given, subs 84(2) of the TP Act was not satisfied, but even if the third Representation was made on behalf of Souths, that subsection was not satisfied for the same reason that it was not satisfied in relation to the second Representation allegedly made by Martin (see [281],[282] above.).

288 Thirdly, for reasons similar to those stated above (at [283],[284]) in relation to the second (positive) Representation, Souths is not liable even if principles lying outside subs 84(2) are applicable because Francis’s understanding that a coach’s view on the retention of a player was subject to higher authority prevents a conclusion that any loss or damage was caused “by” Souths’ conduct.

289 Fourthly, Francis cannot have been induced to play on after 24 May 1998 by a representation implied by the circumstances mentioned which occurred in late July 1998 (cf par 14 of the Pleading). Moreover, since Francis ceased playing following Round 21, which was played on the weekend of 31 July–2 August 1998, he did not suffer any significant detriment or loss in reliance on Coleman’s assurance, having played only the one game in the meanwhile.

290 In so far as Francis pleads contravention of s 53B of the TP Act, he fails for the reasons he fails in relation to s 52 of that Act. I need not deal with a special limitation defence pleaded by Souths to the cause of action founded on s 53B.

291 For the above reasons, the claims of contravention of the TP Act (and of the FT Act) are not made out.

4. Unconscionable conduct and estoppel (Pleading, pars 17-25)

292 Francis pleads unconscionable conduct and estoppel together. Those claims were summarised at [16] earlier.

293 Paragraph 23 asserts that by reason of the facts alleged in pars 17–22 of the Pleading, Souths is estopped from denying the existence of the Contract for the 1999 Season. Paragraphs 24 and 25 of the Pleading assert that by reason of the same facts, ss 51AA, 51AB and 51AC of the TP Act are enlivened. Those sections provide, relevantly, as follows:

“51AA

(1) A corporation must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories.

(2) This section does not apply to conduct that is prohibited by section 51AB or 51AC.”

“51AB

(1) A corporation shall not, in trade or commerce, in connection with the supply or possible supply of ... or services to a person, engage in conduct that is, in all the circumstances, unconscionable.

...

(5) A reference in this section to ... services is a reference to ... services of a kind ordinarily acquired for personal, domestic or household use or consumption.”

“51AC

(1) A corporation must not, in trade or commerce, in connection with:

(a) ...

(b) the acquisition or possible acquisition of ... services from a person (other than a listed public company);

engage in conduct that is, in all the circumstances, unconscionable.

(2) ...

(3) ...

(4) Without in any way limiting the matters to which the Court may have regard for the purpose of determining whether a corporation or a person (the ‘acquirer’) has contravened subsection (1) ... in connection with the acquisition or possible acquisition of ... services from a person or corporation (the ‘small business supplier’), the Court may have regard to:

(a) the relative strengths of the bargaining positions of the acquirer and the small business supplier; and

(b) whether, as a result of conduct engaged in by the acquirer, the small business supplier was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the acquirer; and

(d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the small business supplier or a person acting on behalf of the small business supplier by the acquirer or a person acting on behalf of the acquirer in relation to the acquisition or possible acquisition of the ... services; and

(e) ...

(f) ...

(g) ...

(h) ...

(i) the extent to which the acquirer unreasonably failed to disclose to the small business supplier:

(i) any intended conduct of the acquirer that might affect the interests of the small business supplier; and

(ii) any risks to the small business supplier arising from the acquirers’ intended conduct (being risks that the acquirer should have foreseen would not be apparent to the small business supplier); and

(j) the extent to which the acquirer was willing to negotiate the terms and conditions of any contract for the acquisition of the ... services with the small business supplier; and

(k) the extent to which the acquirer and the small business supplier acted in good faith.

(5) ...

(6) For the purpose of determining whether a corporation has contravened subsection (1) or whether a person has contravened subsection (2):

(a) the Court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and

(b) ...

(7) ...

(8) A reference in this section to the acquisition or possible acquisition of ... services is a reference to the acquisition or possible acquisition of services by a person whose acquisition or possible acquisition of the ... services is or would be for the purpose of trade or commerce. ...”

294 The reference in the Pleading to s 51AB of the TP Act is misconceived. Souths was not supplying any services of the kind to which that section refers – “consumer services”. Francis’s written submissions do not repeat the reference to s 51AB or suggest reliance on that section. I need not refer to it again.

295 Francis’s written submissions state as follows:

“Francis suffered from a special disability, or was placed in a special situation of disadvantage, in dealing with Souths after his injury because he was ignorant of what Souths’ intentions were as to his playing future except to the extent that Souths chose to disclose it to him. Souths was the stronger party and knew about that disability or disadvantage. Souths took unfair advantage of Francis by the use of pressure which went beyond what was fair and acceptable in order to get him to keep playing and postpone his operation. Francis submitted, realising that he had no choice if he wished to continue playing with Souths. In making the representation Souths took unfair advantage of its superior position or bargaining power. In these circumstances, a prima facie case of unconscionability exists, and the onus is then on Souths as the stronger party to show that what occurred was fair, just and reasonable. See Commercial Bank of Australia v Amadio (1983) 151 CLR 447. It has not shown, nor has it attempted to show, this.” (my emphasis)

But the Pleading does not refer to any “special disability” or “special situation of disadvantage” of Francis. I will address his claim of unconscionable conduct as made in his submission.

296 The making of the 1996 Playing Contract is not attacked. Any claim of unconscionable conduct must take as its starting point the terms of that Contract. My finding that Souths’ direction to Francis to resume playing after three weeks was reasonable goes far towards resolving against him the claim of unconscionable conduct.

297 Francis’s submission refers to his ignorance as to Souths’ intentions. But it is common for one party to a contract (A) not to know the intentions of the other party to the contract or negotiation (B). It is also common for B to know that A does not know what B’s intentions are. But, contrary to the suggestion in Francis’s submission, these circumstances do not give rise to a “special disability” on the part of A for the purposes of the equitable doctrine of unconscionable dealing.

298 Although he had not enjoyed academic success at school, Francis was conscious of the need to protect and exploit his marketability. I have noted previously that he was not a “babe in the woods” in relation to the playing contracts of professional footballers. As well, he had the advice of Keenan, a non-practising solicitor who carried on a business, an important part of which was to advise and represent sportspersons, such as Francis, in their contractual negotiations with entities such as Souths. It has not been suggested that Keenan was not adequate to this task. In the circumstances, I do not think Francis suffered from a “special disadvantage” or “special disability” for the purpose of the equitable doctrine of unconscionable dealing, as explained in such cases as Blomley v Ryan (1956) 99 CLR 362 at 405 per Fullagar J, 415 per Kitto J; Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 461 per Mason J, 474 per Deane J; and Louth v Diprose (1992) 175 CLR 621 at 637 per Deane J.

299 Although “the notion of unconscionable behaviour does not operate wholly at large” (Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 185 ALR 1 at [98]), the unwritten law of the States and Territories recognises as unconscionable forms of conduct other than the taking of an advantage from a person who suffers from a special disability or special disadvantage: see Australian Competition and Consumer Commission v Samton Holdings Pty Ltd (2002) 189 ALR 76 at [46]–[50]; and see Laws of Australia, vol 35, “Unfair Dealing”, Notion of Unconscionability [1]–[38]. I do not, however, see any other basis, on which Souths’ conduct towards Francis would be treated as unconscionable according to the unwritten law of the States and Territories.

300 The notion of unconscionable conduct to which s 51AC refers is not limited by reference to specific equitable doctrines: Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 at [24]; Australian Competition and Consumer Commission v Simply No Knead (Franchising) Pty Ltd (2000) 104 FCR 253 at [31]-[37]; Monroe Topple & Associates Pty Ltd v The Institute of Chartered Accountants in Australia (2001) 23 ATPR (Digest) §46-212 at [262]. But for conduct to be “unconscionable” there must be “serious misconduct, something clearly unfair or unreasonable, must be demonstrated” (Cameron v Qantas Airways Ltd (1995) 55 FCR 147 at 179 per Beaumont J), “[s]howing no regard for conscience; irreconcilable with what is right or reasonable” (the same case on appeal at (1996) 66 FCR 246 at 262 per Davies J), and the notion imports “a pejorative moral judgment” (at 283-284 per Lindgren J, Lehane J concurring). These passages were approved by a Full Court in Hurley v McDonald’s Australia Ltd (2000) 22 ATPR §41-741 at [22].

301 Whether or not Francis suffered from a special disability or special disadvantage, Souths’ conduct towards him was not unconscionable according to the criteria just mentioned (I have not overlooked, and have indeed had regard to, the considerations mentioned in the various paragraphs of subs 51AC(4) set out at [293] above). If Francis expected Souths to re-sign him for 1999, it would have been unreasonable for him to base that expectation on a promise or assurance attributed to Souths, and, as previously explained, its direction that he resume playing after a lay-off period of three weeks was a reasonable one. In fact any expectation of the kind mentioned depended for its fulfilment, as Francis knew, on Martin getting his way within Souths followed by a successful negotiation of terms.

302 The pleaded estoppel rests upon the Representations. The first (negative) Representation can, for reasons given earlier, be ignored. My reasoning earlier (at [277]–[289]) in relation to the second and third Representations as supporting a case of contravention of the TP Act is generally applicable. For example, as I explained earlier, I am not satisfied that Martin made the second (positive) Representation.

303 Although Martin lacked actual or ostensible authority to commit Souths to engage Francis for 1999, this does not necessarily defeat Francis in the present non-contractual context. I will assume that, for the purposes of estoppel, it suffices that Martin made the second Representation “in the course of” directing Francis to resume playing after three weeks. Nonetheless, for reasons previously given, I am not persuaded that Francis in fact relied on Martin’s supposed promise or assurance as one given by Souths, as distinct from a pledge by Martin of his personal support.

304 Moreover in view of Martin’s lack of actual or ostensible authority to commit Souths to engage Francis in 1999 and Francis’s understanding that the negotiation and making of contracts with players was not for Martin but was for Cookson to undertake, it would have been unreasonable for Francis to rely on Martin’s having committed Souths. Reasonableness of reliance is relevant to the question of whether departure from an assumption is unconscionable for estoppel purposes: cf Commonwealth v Verwayen (1990) 170 CLR 394 (“Verwayen”) at 445 per Deane J – and see the discussion of reasonableness of reliance under “Negligence” at [317] below.

305 It was similarly unreasonable for Francis to act in reliance on:

· the statement of Cookson to Keenan on 22 June 1998 that Souths “would be prepared to discuss a lesser figure” for 1999;

· Coleman’s “knowingly allowing [Francis] to play the Game with a dislocated A-C joint during the 1998 playing season”;

· Souths not correcting Keenan’s letter of 26 June 1998 to Cookson; or

· Coleman’s “I love Mick” assurance to Keenan at about the end of July 1998 that as long as he (Coleman) was at Souths, Francis would be at Souths;

as giving rise, by implication, to the second (positive) Representation, as a representation by Souths on which he, Francis, was entitled to act in reliance.

306 Coleman’s supposed statement to Keenan towards the end of July 1998 that while he (Coleman) was at Souths, Francis would be at Souths, was made on Coleman’s own behalf rather than on behalf of Souths. If contrary to this conclusion, it was made on behalf of Souths, I am not persuaded that Francis in fact relied on it as made by Souths, and it would have been unreasonable, for reasons similar to those given above in relation to Martin’s supposed second Representation, for Francis to have relied on it as made by Souths.

307 If an estoppel was established, the remedy to be granted would be measured by “the minimum equity to do justice” (Verwayen at 429 per Brennan J, quoting Scarman LJ in Crabb at 198) and this means the minimum necessary to remove the detriment suffered. According to the Pleading, the detriment is the loss and damage referred to in par 29 of the Pleading, described at [18] above.

308 On 22 June 1998, Keenan and Francis were given to understand by Cookson that Souths would not be exercising its option and did not regard itself as bound to re-sign Francis at all. He could have had his operation then – in, say, late June/early July. From that time there was far more than the twelve weeks required for Francis to recover fully so as to be available for the 1999 pre-season training, as well, of course, for the 1999 season itself. As at 22 June 1998, Francis had played only one match (Round 15 on 20/21 June 1998) after his lay-off period of three weeks. I am not satisfied that Francis suffered any significant detriment as a result of his not undergoing surgery between late May/early June on the one hand and late June/early July on the other. His having played only one game between late May/early June and late June/early July is not such a detriment. It is true that as a matter of contractual rights and obligations, Souths was entitled to insist that Francis comply with its reasonable instruction to play out the season and defer the question of surgery. But I infer that as a physical matter, Francis would have had his way at both points of time (late May/early June and late June/early July) if he had insisted on having his operation, as he was later to do in late July after Round 21.

309 In the result, if, contrary to my findings, Martin gave the promise or assurance, Francis relied on it as binding on Souths and it was reasonable for him to do so, yet he did not suffer significant detriment as a result of that reliance.

310 For the above reasons, Souths is not estopped from denying the existence of the Contract for the 1999 Season.

5. Negligence (Pleading, pars 26-28)

311 The duty of care in making the Representations is pleaded as a duty owed by Souths and the Pleading proceeds on the basis that Souths made the Representations negligently. For the moment, I am content to assume that Souths would have owed Francis a duty of care in and about making the Representations, if it made them.

312 Francis has argued, but not pleaded, a case of vicarious liability of Souths for the statements of its coaches. What I have already said about the lack of actual or ostensible authority of coaches Martin and Coleman to bind Souths contractually does not determine whether Souths can be rendered vicariously liable in negligence by their words.

313 The vicarious liability of principals for the tortious acts and words of agents and other independent contractors has been recently discussed in Scott v Davis (2000) 204 CLR 333 at [56]–[72] per McHugh J, Hollis v Vabu Pty Ltd (2001) 207 CLR 21 and in NMFM Property Pty Ltd v Citibank Ltd (2000) 107 FCR 270 at [516]–[522], [835]-[847] per Lindgren J. Those principles would be relevant in the case of Martin if the SMC Agreement was operative. But I will, in favour of Francis, assume that Martin, like Coleman, was employed directly by Souths. On this basis, I think that Souths would be vicariously liable in respect of any negligence in Martin’s words because the alleged first and second Representations were made in the course of his employment by Souths. It is no answer to say that to assure Francis that he would be engaged for 1999 lay outside Martin’s authority as Head Coach and coach of the First Grade team. It did, but it is not disputed that it lay within his authority to direct Francis to play after a lay-off of three weeks, and the supposed first and second Representations were made for the purpose of inducing Francis to follow that direction and in the very conversation in which the direction was given.

314 But for all the reasons given elsewhere, Souths did not incur personal liability to Francis on account of the first or second Representation. If the first Representation was made, it merely threatened a sanction which was almost certain to follow if Francis did not perform his existing contractual obligation, because Souths’ Retention Committee would be most unlikely to impose on Martin for 1999 a player he did not want. The second Representation was not made, and if it was, it could only be reasonably construed by Francis, in the circumstances, as a pledge of Martin’s personal support, and Francis did not in fact rely on it except as such a pledge.

315 Moreover, if contrary to my findings, Martin made the second Representation and Francis acted in reliance on it as a representation by Souths, nonetheless, as explained previously, he suffered no significant detriment by doing so because that Representation ceased to have effect following the conversation between Cookson and Keenan on 22 June 1998 and Francis had played only one match in the meanwhile.

316 In relation to the third Representation, as explained earlier, Coleman made it on his own behalf rather than on behalf of Souths; Francis did not rely on it as a commitment by Souths; and, if he did, he suffered no significant detriment in consequence.

317 If Francis relied on the supposed statements by coaches Martin and Coleman as assurances by Souths that Souths would give him a contract for the 1999 season, that reliance was unreasonable in view of their lack of apparent authority to commit Souths, Francis’s understanding that it still remained for the coach to get his way within Souths, and the absence of any specification by Martin or Coleman of terms. What is the effect, in the context of the claim of negligence, of unreasonableness of reliance? A duty of care in the making of a statement will not arise unless the person making the statement knows or ought to know, not only that the advisee is likely to act in reliance on it, but also that it would be reasonable for him or her to do so: see, for example, Mutual Life & Citizens’ Assurance Co Ltd v Evatt (1968) 122 CLR 556 (HC) at 571-573 per Barwick CJ; (1970) 122 CLR 628 (PC) at 645 per Lords Reid and Morris (dissenting, but not on this point); L Shaddock & Associates Pty Ltd v The Council of the City of Parramatta (1981) 150 CLR 225 at 231 per Gibbs CJ; San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 (1986) 162 CLR 340 esp at 359 per Gibbs CJ, Mason, Wilson and Dawson JJ; Norris v Sibberas [1990] VR 161 at 171-172 per Marks J, with whom Murphy J and Beach J agreed; and see Trindade and Cane, The Law of Torts in Australia (3^rd ed, 1999) at 386; Balkin and Davis, Law of Torts (2^nd ed, 1996) at 415, 420; Clerk & Lindsell on Torts (18^th ed, 2000) at [7-96], [7-111], [7-116]. Martin knew or ought to have known that Francis was likely to take into account in assessing the likelihood of his remaining at Souths in 1999 what he (Martin) said, but only as a pledge of Martin’s personal support likely to be acquiesced in by the Retention Committee. (There is no evidence that Martin reneged on that pledge or intended to do so if he had remained at Souths.) It was not reasonable for Francis to rely on what Martin said as a statement binding on Souths and it cannot be said that Martin ought to have foreseen reliance of that kind as reasonable. Accordingly, Martin did not owe Francis a duty of care in making the supposed second Representation. The same line of reasoning applies a fortiori in relation to the supposed third Representation by Coleman.

318 I turn now to the particulars of negligence given in the Pleading. Particulars (a)–(f) of the claim of breach of the duty of care were set out at [17] earlier. They all consist of failures to advise. I do not think it was required that Souths advise Francis of any of those matters in order to discharge its assumed duty of care. Some of paras (a)–(f) call for special comment as follows:

(a) that there was no obligation under the 1996 Playing Contract [for Souths] to re-sign [Francis] for the 1999 playing season;

(b) that [Souths] might not re-sign [Francis] for the 1999 playing season;

319 Particulars (a) and (b) were inherent in the nature of Souths’ option. Moreover, Francis conceded that he knew that it was Souths’ option and that Souths had the choice whether or not to exercise it.

(c) that [Francis] was not obliged to play in the 1998 season with a dislocated AC joint;

320 In my opinion, for the reasons previously given, Francis was obliged to play in the 1998 season with his dislocated AC joint because he was reasonably directed to do so with the non-surgical treatment referred to by Dr McDonald. Therefore it would have been untrue for Souths to have given him the advice referred to in particular (c). In any event Souths and Francis appear to have proceeded on the basis that if Francis insisted on immediate surgery, as a physical matter he would have had his way. (One may ask rhetorically: What could Souths have done to prevent him?)

(d) that Souths’ option to re-sign [Francis] was not conditional upon his playing [the Game] in circumstances in which he had a dislocated AC joint;

321 Particular (d), if I understand it correctly, was inherent in the nature of Souths’ option: Souths would have had its option whether or not Francis played on.

(e) that deferring surgery until after the 1998 season might preclude [Francis] from being available to play in the pre-1999 playing season and so from entering into a playing contract for that season with Souths or with any other club

322 As this particular accepts, it was not certain that deferring surgery until after the 1998 season would preclude Francis from being available in the 1999 pre-season, and, in consequence, from entering into a playing contract for 1999 with Souths or with any other club. The particular refers to a mere possibility. But the content of Souths’ duty of care must be consistent with the 1996 Playing Contract. That contract allowed Souths to give only reasonable directions. Once it is accepted, as I have found, that Souths’ direction to Francis to return to the field was reasonable, it is difficult to see what scope there is for breach of a duty of care.

323 I do not think that in giving to Francis the reasonable direction to return to the field, Souths was required by its duty of care to draw his attention to possible adverse consequences of its reasonable direction. Francis himself was not without experience in assessing where his best interests lay. I do not think Souths was required by the assumed duty of care to advise him in that respect.

(f) that [Francis] should have been worried about whether Souths would re-sign him for the 1999 season.

324 This particular has reference to the alleged “I love Mick” statement by Coleman to Keenan in late July 1998. For reasons given earlier, this was a statement Coleman made on his own behalf rather than on behalf of Souths. It could only be reasonably understood as such. Souths was not obliged by its supposed duty of care to give Francis countervailing advice. It would have been unreasonable for Francis to act in reliance on Coleman’s pledge of personal loyalty as a commitment by Souths, and Francis did not in fact incur significant detriment in reliance on it.

325 For the above reasons, the claim in negligence is not made out.

loss or damage (Pleading, par 29)

326 I noted at [18] the particulars of loss and damage given in the Pleading. It will be recalled that they were based squarely on the terms of Souths’ option over Francis for the 1999 season. In his written submissions, Francis referred to evidence:

· from Keenan that the market price for players decreased by as much as 30 per cent due to the end of “the Super League war”; and

· that five front-row and second-row forwards who had played with him for Souths in 1998 obtained contracts in 1999 and a later year or later years.

The other five players were: Terry Hermansson, Matt Parsons, Ian Rubin, Paul McNicholas and Justin Doyle. Francis submits that his record with Souths in 1998 was better than four of these five other players. Their contracts were in evidence and their terms were summarised in submissions. Finally, Francis submits that his damages should be assessed as follows:

“(a) for the 1999 season the option fee of $150,000 plus, say, $22,500 for first grade match payments (which assumes he played in 15 first grade matches in 1999 at $1,500 per game), calculated in accordance with the option provision of the 1996 contract; plus

(b) $100,000 for each of the 2000, 2001, 2002 and 2003 seasons being the remuneration which he would probably have earned except for Souths’ conduct.”

In terms of the Pleading, Francis did not testify that he would have been “prepared to accept” any particular terms for the 1999 season, although he said in answer to a question in cross-examination that as at 1 September 1998 his expectation was that Souths would offer him about $100,000 as a sign-on fee for 1999.

327 The playing contracts of the other five players mentioned were all in the standard form of the New South Wales Rugby League and Australian Rugby League form of playing contract, although the special conditions contained in them would have to be taken into account if a comparison had to be made. The level of earnings of other players is irrelevant to the alternative terms of the Contract for the 1999 Season pleaded: the terms of the option or such terms as Francis might be prepared to agree to.

328 If Francis’s submission is to be understood, notwithstanding the Pleading, that the Contract for the 1999 Season impliedly provided for “reasonable” terms, the evidence does not establish what they were, apart from the terms of the standard form of Playing Contract mentioned. There was no evidence led from other clubs of what fees they would have offered Francis in the new market circumstances of 1999 and there was no expert testimony as to his value in those circumstances, in each case on the assumption that he had undergone surgery without delay following the injury and missed virtually all of the 1998 season.

329 Several considerations cause me to conclude that Francis has not proved that he suffered any loss or damage caused by any wrong which the law recognises committed by Souths.

330 I accept that being out of the Game in 1999 would pose a real obstacle to securing a contract for 2000 and for later years, and therefore I need consider only the cause of Francis’s being out of the Game in 1999.

331 Francis claims to recover expectation damages on all the causes of action pleaded. This is inappropriate but, in view of my conclusion just stated, I need not discuss the different measures applicable to the various causes of action.

332 I am in fact not persuaded that Francis was in any worse position in relation to obtaining a contract for the 1999 season than he would have been if he had undergone surgery in late May/early June 1998 rather than on 11 September 1998. Other professional footballers played “carrying injuries”, sometimes throughout a season. I have referred at [218] and [219] to Terry Hill of the Manly Club and Paul McNicholas of Souths. The evidence reveals that Paul McNicholas secured a contract with Souths for 1999.

333 Pearce divided the pre-season into the “off-season” (down to Christmas) and “pre-season, strictly so-called” (from the beginning of January to the first round of the season). The medical evidence, which I accept, is that by the end of twelve weeks following reconstructive surgery of the kind undergone by Francis, a player who had undergone a program of rehabilitative physiotherapy and exercises would be fully recovered in the sense of being able to participate fully in the Game. Pearce said that in the off-season (from the end of a season down to Christmas) players engage in strength based training requiring the use of arms and shoulders. He said that Francis had lost bulk following his operation. He said that if Francis had been “fit and ready to do [the] full off season” he would have been “signable” for 1999. I find that although Francis had fully recovered from his operation and was able to participate fully in the Game by 4 December 1998 (if he was not, that was because he or those assisting him had not taken appropriate steps during the twelve week period following 11 September), he had lost bulk and was not at peak condition at that date. I also find that with training throughout the pre-season, he would have been able to build up bulk so as to be back at the peak of fitness by the start of the 1999 season at the beginning of March of that year.

334 In my opinion, if any club had had a strong interest in engaging Francis for 1999, the fact that he had lost bulk and was not at the peak of fitness as at 4 December 1998 would not have been an obstacle. It would have been known that he had had surgery on 11 September 1998, was fully recovered from the operation, was able to participate fully in pre-season training and would be back to full bulk and fitness by the start of the 1999 season.

335 According to Keenan, the only clubs that expressed the slightest interest in Francis for 1999 were Souths, Balmain and Adelaide. Of these three, Balmain’s interest was, on the evidence, the strongest. Pearce said to Keenan on 27 May 1998 (being uninformed of Francis’s injury the previous weekend) that he would be interested in talking to Francis and that Balmain would be quite “interested in discussing the signing of Michael” after 30 June 1998 when such discussions were able to take place consistently with the League’s “anti-tampering” rules. In his affidavit Pearce stated as follows:

“I was interested in Michael as I believed Michael’s ability lay in his aggression, strength, speed and high work rate. Michael was one of the lighter front-row forwards in the ARL and NRL competition but this was compensated by his tough uncompromising way and also his high work-rate.”

Pearce also stated in his affidavit:

“But for Michael Francis’s physical condition in September 1998, I would have been very keen to have Balmain sign Michael Francis and would have recommended the Balmain Retention Committee negotiate with Michael Francis with a view to signing Michael with Balmain.”

336 But Pearce did not contact Keenan after 30 June 1998. Nor did he address what the position would have been if Francis had had his operation in late May/early June. It must always be borne in mind that, if Francis had undergone surgery then, he would certainly have been out of the Game for nearly all of what remained of Souths’ participation in the 1998 season. Moreover, apparently, the most that Pearce could say in the witness box about his assessment of Francis’s ability as a player was this :

“... my recollections are that, yes, he was solid without being the best player on the field, which he never was. He was the sort of aggressive go-forward player that I thought would benefit the Tigers [the Balmain Club] at the time.”

337 The fact that there was no contact between Pearce and Keenan from 27 May 1998 to a time between 28 August and 1 September 1998 suggests a lack of any real interest on Pearce’s part in seeing Francis signed.

338 I am doubtful whether, even in the absence of injury, Francis would, in the new market circumstances, have secured a contract for the 1999 season with Souths or with any other club, other than the arrangement he in fact made with Wests. But I will assume that he would have. The alternatives of his absence from the field in 1998 (if he had had surgery in late May/early June) and of his need to regain bulk during the 1999 pre-season (as he in fact needed to do), would be equally apt or inapt to militate against his securing a contract in the new, more difficult market conditions of 1999.

339 It remains to mention three other matters in relation to loss or damage. The first is that from 22 June 1998 Keenan and Francis knew that Souths would not be exercising its options, but “would” or “might” be prepared to discuss a lesser figure. Francis knew then that agreement might never be reached on the lesser figure. Certainly from that time he knew he could no longer rely on any representation or assurance that he would be with Souths in 1999. He could have proceeded without delay after 22 June 1998 to have his operation. Keenan conceded that, if Francis had done so, there would have been sufficient time for him to withdraw from the competition and be fit for the 1999 pre-season, but said he was still “pretty confident” at that stage that Souths would re-sign Francis. At least in relation to the non-contractual causes of action, Francis’s loss or damage would have to be identified on the basis that Souths was not liable for the delay in surgery beyond say late June/early July.

340 The second matter relates to the effect of Cookson’s words to Keenan on 22 June 1998 on the recovery of damages for breach of the supposed Contract for the 1999 Season. For present purposes, it must be assumed that all difficulties in connection with the making of that contract do not exist. It must be assumed, for example, that Souths’ direction to Francis to continue playing was in fact, and contrary to my finding, unreasonable, and that Francis had accepted Souths’ offer by deferring surgery and returning to the field for the one match in Round 15 (20/21 June 1998).

341 Cookson’s words to Keenan on 22 June 1998 would, on my view of them (see [192] earlier) have constituted a repudiation of the supposed Contract for the 1999 Season. Would Francis have been obliged to elect to accept that repudiation and have his operation as soon as possible after 22 June, rather than continuing to defer surgery and to play matches in the 1998 season? If not, apparently he would have been entitled to continue to defer surgery; continue to play throughout the 1998 season (Souths would cooperate in view of its stance that Francis was obliged to play on in any event); after the end of the season, undergo surgery; then present himself to Souths for training with a view to playing in the 1999 season; then, when Souths refused to cooperate (as, ex hypothesi, it would) treat that refusal as a repudiation, accept it and sue Souths then for damages.

342 In my opinion, contrary to Souths’ submission, Francis would not have been obliged to accept Souths’ repudiation, committed through Cookson, on 22 June 1998. Generally speaking, it is not incumbent on the innocent contracting party to exercise the right of election between accepting a wrongful repudiation on the one hand and maintaining the contract on foot on the other. This is the principle of the well known House of Lords decision in White and Carter (Councils) Ltd v McGregor [1962] AC 413. Much has been written about that principle, but a discussion of it would be superfluous to the necessities of this case. It suffices to note that a particular reason why the principle would be appropriately applied in the circumstances of this case is that, in the circumstances hypothesized, it would be Souths’ own contention that Francis was obliged under the 1996 Playing Contract, and, independently of any Contract for the 1999 Season, to continue playing throughout the 1998 season. Since it would be the wish of both Souths and Francis that he continue playing to the end of the 1998 season, it would be an unreasonable intrusion into the parties’ contractual relationship for a court to require Francis to accept Souths’ repudiation in the hope of minimising the damages payable by Souths.

343 The third matter relates to the delay between very early August (after Round 21 on 31 July–2 August) when Francis decided to cease playing and 11 September 1998 when he had his operation. For part of this period, Souths is not responsible either. Dr Gibbs explained that because Francis had cancelled the earlier arrangement which had been made with Dr Bokor for surgery, he (Dr Gibbs) thought it would not have been a “wise move” for him to use his good offices with Dr Bokor and his staff to seek an early date for Francis’s operation. Dr Gibbs said:

“ ... knowing Dr Bokor very well, he’s a very good surgeon, I have good access to actually being able to book players in for operations which most doctors would not have. Michael, when he cancelled that operation, obviously caused a bit of angst amongst Dr Bokor’s office so unfortunately the second time around I couldn’t pre-book his operation, I knew that wouldn’t be a wise move. Hence the delay [to] in the mid-September surgery date.”

I infer that if the earlier appointment with Dr Bokor had not been made, as Francis had insisted it should, an appointment earlier than the one for 11 September would have been made for his actual operation. I infer that it would have been made for mid-August. The cross-examination of Dr Gibbs included the following:

“Can I suggest this to you that if Mr Francis had had his operation in say the middle of August 1998, he would have been fit to return to the field within 12 weeks of that time? --- Yes.”

Thus, although it is a minor issue in the case, once it is accepted, as I have found, that Souths’ direction to Francis to continue playing was reasonable, the first appointment with Dr Bokor must have been made (at Francis’s insistence) unreasonably and the delay in the operation from mid-August to 11 September and its sequelae cannot be laid at Souths’ door, even for the purpose, for example, of the cause of action for breach of the Contract for the 1999 Season.

conclusion

344 For the above reasons the application should be dismissed with costs.

I certify that the preceding three hundred and forty-three (344) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

Associate:

Dated: 8 November 2002

Counsel for the applicant:	Mr PM Biscoe QC and Mr M Zammit

Solicitors for the applicant:	Woods & Day

Counsel for the respondent:	Mr M G Scheib

Solicitors for the respondent:	Nicholas G Pappas & Company

Dates of Hearing:	3, 4, 5, 6, 10, 11 December 2001, 5 April 2002

Date of Judgment:	8 November 2002

Top

INTroduction [1]–[4]

pleading [5]–[18]

facts in outline [19]–[93]

various written contractual arrangements [94]–[140]

certain aspects of the evidence [141]–[200]

causes of action [201]–[325]

loss or damage [326]–[343]

conclusion [344]

INTroduction

pleading

facts in outline

General

Chronological account

Monday 25 or Tuesday 26 May 1998

Tuesday 26 May 1998

Wednesday 27 May 1998

Following Round 18 (apparently on 13 or 14 July 1998)

Towards the end of the 1998 season

31 August 1998

On or about 1 September 1998 (or perhaps as early as 28 August)

4 September 1998

11 September 1998

28 October 1998

2 November 1998

On or about 7 November 1998

Later the same day or a few days later

15 November 1998

Late November 1998

various written contractual arrangements

1. Souths’ Retention Committee and Selection Committee

General– actual and apparent authority to engage players

Francis’s understanding

Keenan’s understanding

2. The CS Agreement between Souths and SMC

3. The Agreement (between Francis and AMI)

4. The 1996 Playing Contract

certain aspects of the evidence

1. Witnesses – credit

2. Failure of either party to call Martin

3. Martin’s alleged statement to Francis in their face to face conversation on Monday 25 May 1998

4. Martin’s alleged statement to Keenan over the telephone on Tuesday 26 May 1998

5. Martin’s alleged statement to Leisa Francis on or about Tuesday 26 May 1998

6. Martin’s alleged statement to Francis on or about Saturday 30 May 1998

7. Keenan’s telephone conversation with Cookson on or about 22 June 1998 and Keenan’s letter following

8. Telephone conversation between Keenan and Coleman in late July 1998 (following Round 20)

causes of action

1.1 Breach of implied contractual duty of Souths to act reasonably and in good faith towards Francis when requiring or selecting Francis to play, or giving him orders relating to training or playing (Pleading, pars 2-4)

(1) Souths failed to have regard to the recommendation of Dr Gibbs that Francis undergo surgery immediately

(2) Souths failed to have regard to Francis’s state of health in determining his obligation to play to the best of his ability or at all

(3) Souths threatened or represented that it would re-sign Francis for the 1999 season only if he continued playing with his injury and deferred his AC joint reconstruction until after the 1998 playing season

1.2 Breach of contract made in or about May to July 1998 that Souths would re-sign Francis for the 1999 season on the terms contained in the option provision in the 1996 Playing Contract or on such other terms as Francis was prepared to agree to (Pleading, pars 5-8)

(a) in so far as it [the Contract for the 1999 Season] was express it was entered into orally on or about 25 May 1998 between the Applicant and Steve Martin who was at the time the coach of the Respondent’s first grade team;

(b) in so far as it [the Contract for the 1999 Season] was implied the implication arose:

(b) in so far as it [the Contract for the 1999 Season] was implied the implication arose:

(b) in so far as it [the Contract for the 1999 Season] was implied the implication arose:

(b) in so far as it [the Contract for the 1999 Season] was implied the implication arose:

2. Breach of fiduciary duty (Pleading, pars 9-12)

3. Contravention of the TP Act (Pleading, pars 13-16)

4. Unconscionable conduct and estoppel (Pleading, pars 17-25)

5. Negligence (Pleading, pars 26-28)

loss or damage (Pleading, par 29)

conclusion

3. Martin’s alleged statement to Francis in their face to face conversation on Monday
25 May 1998

7. Keenan’s telephone conversation with Cookson on or about 22 June 1998 and
Keenan’s letter following