FEDERAL COURT OF AUSTRALIA

Lawrence v Melbourne Football Club Ltd [2024] FCA 945

ORDERS

THE COURT ORDERS THAT:

1.    The plaintiff have leave to amend his originating process dated 4 December 2023 in accordance with Schedule C attached to his written closing submissions dated 14 May 2024.

2.    The amended originating process be dismissed.

3.    If the parties are unable to resolve the question of costs, then:

(a)    the plaintiff file and serve a written submission about the issue, not exceeding 5 pages, within ten days;

(b)    the defendant file and serve a written submission about the issue, not exceeding 5 pages, within ten days of receipt of the plaintiff’s submission.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

O’CALLAGHAN J

INTRODUCTION

1    The plaintiff, Mr Lawrence, is a longtime and well respected member of, and donor to, the Melbourne Football Club Ltd (which I will refer to either as “the MFC” or “the club”). For some years now, he has unsuccessfully sought election to its board oaf directors, and since at least 2021, has campaigned to bring about changes to the rules of the club governing such elections.

2    Mr Lawrence, over the past few years, has had a number of disagreements with the board over those rules. As will be explained, before 2020, the MFC had not conducted a contested election for board positions since at least 2004, and did not before that time have in place any publicly available election rules governing the conduct of board elections. Since rules related to the conduct of elections were introduced, Mr Lawrence has campaigned to have them changed to make them less restrictive. The board has considered Mr Lawrence’s views and to some extent has adopted them by making certain changes to the rules. But the board maintains its view that the extant electioneering restrictions in the rules that Mr Lawrence opposes — which include prohibitions on giving interviews to the media, posting to websites or to social media platforms material that can be viewed by the general public, and making statements which disparage or otherwise reflect adversely on the standing of the club — are reasonable and necessary, including to stop the conduct of elections turning into what the club calls a “media circus”.

3    By an originating process filed on 4 December 2023, Mr Lawrence sought a declaration that certain conduct of the MFC regarding elections to its board of directors is contrary to the interests of its members as a whole, and oppressive to members, such as Mr Lawrence, seeking election.

4    He also sought orders that the club’s election rules be amended to address the effect of the alleged oppressive conduct.

5    Specifically, he sought a declaration pursuant to s 232 of the Corporations Act 2001 (Cth) (the Act) that the following conduct of the club is contrary to the interests of its members as a whole, and oppressive to members including himself “and other non-aligned candidates” seeking election to its board of directors, viz:

(a)    the practice of the board filling casual vacancies shortly before an election where those recently appointed directors then nominate for the upcoming election (casual vacancies complaint);

(b)    the board’s failure to provide notice to all members of the MFC of the opening of nominations for election to the board prior to the commencement of the nomination period (notice of nominations complaint);

(c)    the board’s endorsement, communicated to all members of the MFC, of existing directors running for election (including of those directors who have been appointed by the board to fill casual vacancies shortly before the election) (endorsement complaint);

(d)    the prohibition under the election rules made by the board on “electioneering” (electioneering complaint); and

(e)    the “Candidate Review” process conducted pursuant to the election rules, which is not independent of the incumbent directors (candidate review complaint).

6    He also sought orders, pursuant to s 233 of the Act, that the club’s election rules be amended:

(a)    “to permit electioneering” by candidates for election to the board;

(b)    to require voting members to be provided with notice, at least 14 days prior to the commencement of the nomination period for elections to the board, of the following matters:

(i)    the number of board vacancies that are required to be filled;

(ii)    whether the incumbent board members intend to re-nominate for election for an additional term of office;

(iii)    the number of vacancies which are available to be filled by the board, including casual vacancies which have been filled prior to the election; and

(iv)    the process for members to nominate for election to the board; and

(c)    so that the “Candidate Assessment Committee” is independent of the board and conducts the Candidate Review process in a transparent way.

7    In advance of the trial, the parties prepared an agreed joint list of issues for determination, which was in these terms:

1.    Is there a practice of the Board filling casual vacancies shortly before an election where those recently appointed directors of the defendant (MFC) then nominate for the upcoming election?

2.    Does the Board fail to provide notice to all members of MFC of the opening of nominations for the election to the Board prior to the commencement of the nomination period?

3.    Does the Board endorse to all members of MFC the existing directors running for election (including those directors who have been appointed by the Board to fill casual vacancies shortly before the election)?

4.    Is there a prohibition under the election rules (pages 455-460 of the Exhibit to the Affidavit of Peter Lawrence) made by the Board (Election Rules) on electioneering?

5.    Did the Board have the power to make election rules in the form of the Election Rules?

6.    Is the conduct referred to in paragraphs 1 to 5 above (whether individually or cumulatively):

(a)     conduct of MFC’s affairs;

(b)     actual or proposed acts or omissions by or on behalf of MFC (the Conduct).

7.    Considering the circumstances in which it occurred, is the Conduct (whether individually or cumulatively):

(a)     contrary to the interests of the members as a whole; or

(b)     oppressive to, unfairly prejudicial to, or unfairly discriminatory against a member or members (including the plaintiff and any other member wishing to seek election to the Board of Directors of MFC);

8.    If so, ought the Court grant a declaration to that effect?

9.    Further, ought the Court order the relief set out in paragraph 2 of the Originating Motion or such other relief as the Court deems fit?

8    The originating process and the agreed list of issues, and the affidavit material on both sides, were the documents that defined the scope and nature of the dispute at the commencement of the trial. The MFC was not required to, and did not, file any pleading like document by way of defence.

9    At the trial, Mr James W S Peters AM KC and Ms Alexandra Folie of counsel appeared for Mr Lawrence. Mr Michael I Borsky KC and Mr Karan Raghavan of counsel appeared for the MFC.

10    By the conclusion of the trial, the issues in contention had been whittled down significantly. In particular, Mr Lawrence no longer sought declaratory relief in respect of the casual vacancies complaint, the notice of nominations complaint, the endorsement complaint, or the candidate review complaint, and the only orders sought were that the club’s electioneering restrictions be amended.

11    Issues 5, 6(a) and 8 in the list of issues fell away because Mr Lawrence conceded issue 5, the club did not dispute 6(a) and Mr Lawrence did not press 8.

12    It is helpful to explain briefly how that came to be.

13    First, shortly before the trial commenced, the board amended the election rules to require that the Candidate Assessment Committee comprise a majority of independent representatives. Satisfied with those amendments, Mr Lawrence no longer pressed his candidate review complaint.

14    Secondly, at the beginning of the trial, Mr Lawrence by his counsel conceded that the board had the power to make the election rules, so issue 5 in the joint list of issues fell away.

15    Thirdly, during the trial, the board resolved to remove from the election rules a prohibition on candidates using or obtaining the register of the club’s members for the purpose of campaigning. This had the effect of narrowing the scope of prohibited forms of “electioneering” under the rules, which satisfied some, but not all, of Mr Lawrence’s complaints about the electioneering rules.

16    Fourthly, the club accepted in its written closing submissions that the conduct about which Mr Lawrence complained formed part of its “affairs” for the purposes of s 232 of the Act, so issue 6(a) also fell away.

17    Fifthly, by the time his closing submissions had been completed, the only order that counsel for Mr Lawrence sought was that certain rules that were the subject of his electioneering complaint be struck out.

18    Sixthly, shortly after the trial had concluded, the board resolved further to amend the election rules to make clear that the prohibition on candidates making statements in the course of elections which “disparage or otherwise reflect adversely on the standing of the Club or its players, Members, Directors, officers, staff, Nominees or Candidates” does not prevent reasonable or constructive criticism.

THE EVIDENCE

19    Mr Lawrence read two affidavits affirmed by him on 4 December 2023 and 18 April 2024 respectively.

20    Mr Lawrence is a former finance professional. He is now retired. He has been a member of the MFC since 1992. In his first affidavit, he gave evidence about:

(a)    the MFC’s constitution;

(b)    his extensive personal involvement with the club (including significant sponsorship and donations);

(c)    the circumstances surrounding his nominations to become a director of the board in elections held between 2020/2021, 2021/2022, 2022/2023 and in December 2023;

(d)    the board election rules as they existed at the relevant times and the various amendments made to them between 2020 and 2023;

(e)    correspondence between solicitors for the parties regarding Mr Lawrence’s concerns about the election rules and the openness, fairness and transparency of the December 2023 election;

(f)    his continuing concerns about the election rules as they existed at 4 December 2023, and the club’s conduct of elections more broadly; and

(g)    the board election rules of other Australian Rules football clubs.

21    In his second affidavit, Mr Lawrence responded to the evidence filed by the MFC. He also gave evidence about the changes the board had resolved to make to the club’s election rules in April 2024, which Mr Lawrence said addressed some, but not all, of the concerns he had been raising with the club since 2021.

22    The MFC read four affidavits of Mr David Rennick, director and Vice-President of the club, affirmed on 4 March, 5 April, 2 May and 10 May 2024 respectively. After the trial, the club (with leave) filed a further affidavit of Mr Rennick affirmed on 19 June 2024.

23    Mr Rennick has been a director of the club since November 2020 and Vice-President since September 2023. He has over 30 years of experience in the legal and property industries, and over 10 years’ experience serving on boards of both commercial and non-for-profit organisations. In his affidavits, Mr Rennick gave evidence about the rationale for the introduction of the club’s election rules, and the decision-making process underpinning the various amendments that have been made to them.

24    In his 4 March 2024 affidavit, Mr Rennick deposed about those matters, including as follows:

During my time as a director of MFC, it has been the Board’s practice to perform a review of the election procedures each year to identify what worked well and what could be improved. The Board is continuously looking to improve these procedures, and, where appropriate, has made and will continue to make adjustments which we consider to be in the best interests of the Club and its members.

….

The need for the Election Rules to contain a restriction on electioneering was discussed and considered by the Board at a meeting on 10 January 2022, which I attended. The meeting occurred in the context of the Board considering amendments to the electioneering restrictions including those contained in the election rules subsequently sent to candidates for the 2021/22 election on 11 January 2022 … The minutes of the meeting record the following matters in relation to the Board’s consideration of the purpose of the electioneering restrictions:

A discussion was held about the two purposes of the Election Rules insofar as electioneering is concerned. One is to restrict an inflammatory public campaign outside the club and the second is to create a level playing field.

The Board noted that no advantage should be given to wealthy candidates who could afford:

(a) the $60,000 cost of postal communications; and/or

(b) to pay for media relations and lobbying consultants, etc.

It was also noted that electioneering reduced the likelihood of the best candidates with appropriate diversity running because they might not be willing or able to pay for those things and might not want to be caught up in the spectacle of a media circus.

I consider that the matters recorded in the minutes are important for alignment of the election process to the Club’s values.

The minutes also record the following as to the Board’s reasons for including the electioneering restrictions in the rules:

(f)    the restrictions on electioneering as contained in the existing Director Election Rules and clarified by the Proposed ER Amendments (as agreed to be further amended at the meeting) are necessary and appropriate for the following reasons:

(i)    the restrictions provide for equity and fairness in the election process for the candidates including with respect to candidate material to be published;

(ii)    the restrictions provide a process to attract the best candidates, including (i) not favouring those with financial resources or the financial backing to run public campaigns which will discourage suitable candidates without those resources to seek nomination, and (ii) not reducing the likelihood of the best candidates with appropriate diversity running because they may not want [to] be caught up in the spectacle of a media circus;

(iii)    the restrictions do not permit prospective board candidates to campaign and broadcast additional election material in the public domain via a multitude of digital or online platforms or publications which extend far beyond a written statement to members increases the risk of the Company’s good standing, image and reputation being adversely affected or damaged as a consequence of the unsubstantiated, false or misleading statements, criticisms or claims being publicly made about or against the Club Board, the management of the Company or candidates;

(iv)    current directors of the Board are restricted from publicly discussing, promoting or advertising their candidacy due to their strict board obligations (which includes a duty to maintain confidentiality) and the Company’s media policy only allowing the President to speak publicly about Company matters. In the interest of ensuring a fair and impartial election, it is imperative that all prospective board candidates be treated equally in that they are all required to abide by the same rules and restrictions and no prospective board candidate is given an unfair competitive advantage over another;

…

25    Mr Rennick went on to say that “another matter reflected in the board minutes is the risk of the Club or other candidates being subjected to unfair attacks via the media if there were no restrictions on electioneering”, explaining as follows:

Since I have been a director of the Club, I have observed that the Club is subject to a much higher degree of media interest and exposure than any other corporate or community organisation with which I have been associated. Whilst that is not necessarily a bad thing, it does mean there is a greater risk that elections of the Club could descend into a media circus – i.e. where campaigners are publicly attacking each other or the Club via the media, or where the media use comments made by candidates in a campaign as a pretext for unfair and negative stories about the Club.

26    Both Mr Lawrence and Mr Rennick were cross-examined.

THE FACTS

The MFC and its constitution

27    The MFC is an Australian Rules football club, limited by guarantee. As at 31 October 2023, it had over 70,000 members.

28    It operates under a license from the Australian Football League (AFL) and is a participant in the football competitions of the AFL, AFL Women’s (AFLW), Victorian Football League (VFL) and VFL Women’s (VFLW).

29    The MFC is governed by a constitution, which provides that its primary objective is preserving and fostering the ideals and tradition of Australian Rules football, and promoting the playing of Australian Rules football in general, including maintaining, providing, supporting and controlling a team or teams of footballers to compete in the AFL men’s and women’s competitions.

30    The constitution, at all relevant times, has also provided that:

(a)    in order to stand for election to the position of a director and be appointed as a director of the club, the member must be a “voting member”;

(b)    the election of directors is to take place by ballot, and is to be conducted by “secret ballot”;

(c)    all “voting members” (since October 2022, those “[v]oting [m]embers who held a membership ticket for the season immediately prior to the election”) will be entitled to cast a vote, being a number of votes “which is equal to the number of vacancies”;

(d)    subject to (c), among other things, the board “in its absolute discretion and from time to time may determine the form, timing and conduct of the ballot”; and

(e)    the board has the power to “make, amend or repeal any ‘Rules’ as it sees fit for the proper conduct and management of [the MFC], its business, membership and affairs … provided the Rules are not inconsistent with” the constitution.

31    Eight members currently serve on the club’s board of directors. Board members are unpaid.

Mr Lawrence

32    Mr Lawrence has been a member of the MFC since 1992 and gave evidence about his extensive involvement with it.

33    In cross-examination, Mr Rennick described Mr Lawrence as a “significant donor” who is held in “high regard” by the club.

34    Mr Lawrence has also been a member of a number of associations connected to the MFC, including the President’s Club, the Inner Sanctum, the Women’s Foundation and the Demon Army. He has donated significant amounts of money to the club, as a “Foundation Legend” with “Gold” status, something that is granted to donors who have made total contributions between $150,000 and $249,000. Mr Lawrence has also sponsored both AFL and AFLW players.

The 2020/2021 election and the introduction of the election rules

35    On 17 July 2020, Mr Lawrence attended a “Zoom” meeting with Mr Glenn Bartlett and Mr Mohan Jesudason, then Chairman and Co-Vice Chair of the MFC respectively, where he first raised his interest in joining the board. Mr Lawrence’s evidence was that he was told at that meeting by Mr Bartlett and Mr Jesudason that while a line had not been ruled through his name, his nominating for election would not help as the board did not want publicity, and that the process of a contested election would cost $200,000.

36    A few days after that meeting, Mr Bartlett sent an email to Mr Lawrence telling him, among other things, that “in terms of looking at the board position/skills we would be looking at filling over the next 2-3 years we do not see you in the mix”.

37    On 22 October 2020, it was announced by a notice published on the club’s website that Mr Brad Green and Mr Rennick would be joining the board effective from 1 November 2020.

38    In response to an advertisement published in the Herald Sun newspaper on 26 October 2020, Mr Lawrence lodged a nomination form as a candidate for election to the board in the election held between 2020 and 2021.

39    On 2 November 2020, Mr David Chippindall, then the club’s company secretary, sent an email to Mr Lawrence informing him that there were five candidates for four board positions, and that an election would take place (via postal ballot). Before 2020, the MFC had not conducted a contested election since at least 2004.

40    After submitting his nomination, Mr Bartlett and Mr Jesudason asked Mr Lawrence to withdraw his nomination several times, informing him that the board would only endorse the candidates who were incumbent directors, including Mr Green and Mr Rennick, who had been appointed to fill casual vacancies.

41    On 13 November 2020, Mr Lawrence received a letter from Mr Bartlett on behalf of the board which relevantly stated:

Putting the significant cost of an election to one side, an ‘independent’ (i.e. non-supported) nomination has to be seen as a challenge to the leadership of the Chair and the performance of the Board. This is not consistent with the collaborative and stable approach we have worked hard as a Board to deliver. You are of course entitled to pursue your nomination, but by doing so you will be pursuing a path which is contrary to the Board’s position and the resultant election process will therefore be adversarial in nature.

As Chair you will put me in the position of having to explain the Board’s resolve (both publicly and privately) and I will need to outline the reasons for supporting the 4 Board endorsed candidates and the reasons why the Board does not support your nomination. This will not be in the interests of the Club, the Board, the Executive, the Players or yourself in our view.

…

In summary, your candidacy is not supported by the MFC Board and I respectfully request that you withdraw your nomination.

42    On 18 November 2020, Mr Lawrence sent a letter to the board confirming that he would not withdraw his nomination.

43    On 25 November 2020, Mr Bartlett sent a letter to Mr Lawrence on behalf of the board in response, telling him that the board did not consider him to be a suitable candidate and that his candidacy was not endorsed.

44    The next day, the MFC enacted its first set of election rules (First Election Rules), which relevantly provided:

6.    Rules

(a)    All Election Material provided by a candidate to the Club during the nomination and election period requires the approval of the Secretary. For the purpose of these Rules, election material includes the content of a ballot paper, candidate statement, material intended to be published in a newspaper or displayed on signage in a public place and content published on any official Club social media site, which is produced by a candidate or on behalf of a candidate for the purpose of the election (“Election Material”).

(b)     The Election Material provided by a candidate to the Club, Members or otherwise during the nomination and election period must not:

(i)     Reflect adversely on the standing of the Club;

(ii)     Contain any matter or thing that is likely to mislead or deceive Members in relation to the casting of their vote;

(iii)     Make any personal criticism of another candidate or Board Member;

(iv)     Directly or indirectly seek endorsement of election from any current player or employee of the Club or refer to or claim any such endorsement; or

(v)     Use any item of the Club’s intellectual property or information that is known to be confidential.

(c)     Candidates will not be permitted to advertise Election Material in any Club publication.

(d)     Candidates advertising Election Material in external publications or social media sites are required to abide by the guidelines contained in Rule 6(b) and such Election Material must first be approved by the Secretary.

(e)    Candidates advertising Election Material in external publications are not permitted to use the Club’s logo, branding or any items which suggest the advertisement has been authorised by the Club.

(f)    The behavioural conduct, expectations and requirements of a candidate are required to adhere to the Constitution and all Rules of the Club and a candidate must not refuse or neglect to comply with the Constitution or any Rules or be guilty of conduct unbecoming to a Member or conduct dishonourable or prejudicial to the interests of the Club.

45    On 9 December 2020, the MFC published a revised set of election rules, introducing a restriction on “electioneering” (Second Election Rules). Clause 6 read as follows:

(a)    Election Material provided by a candidate to the Club during the nomination and election period requires the prior written approval of the Returning Officer and must abide by the guidelines contained in Rule 6(b). For the purpose of these Rules, election material means and is limited to the written candidate statement provided by a candidate in accordance with Rule 5 (“Election Material”).

(b)    The Election Material provided by a candidate to the Club during the nomination and election period must not:

(i)    Reflect adversely on the standing of the Club;

(ii)    Contain any matter or thing that is likely to mislead or deceive Members in relation to the casting of their vote;

(iii)    Make any personal criticism of another candidate or Board Member;

(iv)    Directly or indirectly seek endorsement of election from any current player or employee of the Club or refer to or claim any such endorsement; or

(v)    Use any item of the Club’s intellectual property (including the Club’s logo and branding) or information that is known to be confidential.

(c)    Except as provided for by Rule 6(a) above, candidates are not permitted under any circumstances to engage in “electioneering”. For example, “electioneering” includes, without limitation; advertising, promoting or disclosing (or authorising another person to advertise, promote or disclose), directly or indirectly, details of an election (including the election process) or the fact that he or she is a candidate in any external publication, social media site or via any other medium that is in the public domain.

(d)     The behavioural conduct, expectations and requirements of a candidate are required to adhere to the Constitution and all Rules of the Club and a candidate must not refuse or neglect to comply with the Constitution or any Rules or be guilty of conduct unbecoming to a Member or conduct dishonourable or prejudicial to the interests of the Club.

46    Prior to the election, on 14 January 2021, Mr Bartlett wrote to all members, formally endorsing the incumbent directors running for election, and identifying them as the four “board endorsed candidates”.

47    On 15 February 2021, Mr Lawrence was told by the club that he had been unsuccessful in seeking election to the board.

The 2021/2022 election

48    In November 2021, Mr Lawrence learned from a notice posted on the club’s website that Ms Sally Freeman had been appointed to the board, and that another set of election rules had been issued (Third Election Rules).

49    The Third Election Rules introduced a “candidate assessment” process involving two stages.

50    The first was an “Eligibility Review”, by which the company secretary or returning officer would assess whether a nominee met “minimum governance criteria for the candidate to progress to candidacy for election”. If the nominee did not meet the Eligibility Review requirements, their nomination would not be progressed. If a nominee successfully met the Eligibility Review criteria, they became a candidate for election.

51    The second stage was a “Candidate Review”, in which a candidate had to agree to participate. The Candidate Review involved the “Election Committee” taking all and any steps to assess the candidate’s “alignment with the Board Credential Statement”. The Election Committee was established by the board before each election and comprised some or all of the directors of the board who would not be nominees or candidates in the election. If, after undertaking the candidate review process, the Election Committee formed the view that a candidate met the relevant criteria, a statement to the effect that the candidate had been assessed as qualified for candidacy would be included in that candidate’s “Candidate Statement” distributed to voting members.

52    The Third Election Rules also made clear that the board retained a discretion to endorse a candidate or candidates.

53    On 30 November 2021, Mr Lawrence again nominated for election to the board, as did one other non-incumbent candidate.

54    Mr Lawrence deposed that, upon informing Mr Rennick of his nomination, Mr Rennick told him that he was disappointed and invited Mr Lawrence to withdraw the nomination. Mr Lawrence declined to do so.

55    In December 2021, Mr Lawrence was informed that he had met the Eligibility Review requirements and elected to participate in the Candidate Review.

56    Around this time, Mr Lawrence began advocating for changes to be made to the club’s election rules and practices. Mr Lawrence wrote to the MFC, through his solicitor, setting out his view that the prohibition on electioneering in the Third Election Rules contravened his rights as a member of the club. In short, Mr Lawrence argued that the rules attempted to set up a “closed shop” election which precluded “meaningful and reasonable participation” by voting members. He sought amendments to the rules which would permit him to communicate to members about his candidacy through:

(a)    social media profiles that included a reference to him being a candidate for election;

(b)    a publicly available website setting out his credentials and why members should vote for him;

(c)    the ability to engage on social media platforms with voting members regarding the election;

(d)    the ability to engage with the media, podcasts and other MFC supporter forums;

(e)    a member’s forum (to be arranged by the MFC) where all candidates could make a short presentation about the value they could bring to the board;

(f)    a short video from each candidate to be posted to the MFC’s website; and

(g)    advertising in the Herald Sun newspaper.

57    The MFC, through its solicitors, responded to Mr Lawrence in late December 2021, setting out the club’s views and explaining that, in the view of the board, the director election process was a private one; that the board did not agree to electioneering in the public domain or the possibility of the election process descending into a “media circus”; and that the electioneering restrictions in the rules created a level playing field. The letter relevantly stated:

4. Restrictions on electioneering

The director election process is a private process of director appointment undertaken by voting members. The Board will not agree to electioneering in the public domain or the possibility of the election process descending into a media circus. The electioneering restrictions create a level playing field as to the campaign that may be undertaken by all candidates irrespective of personal financial resources and provide safeguards to protect against inappropriate behaviours.

The MFC Board is prepared to continue to engage with your client as to the possible approval of conduct that involves private engagement with voting members where there is no intrusion into the privacy of those persons. None of the seven platforms you have proposed currently satisfies these threshold requirements.

58    Prior to voting opening for the 2021/2022 election, the MFC issued a further set of election rules (Fourth Election Rules), which, while maintaining the general restriction on electioneering in clause 9, inserted a definition specifying the kinds of conduct that would, and would not, constitute “electioneering” as follows:

(b)    Except as provided for under these Rules, Candidates are not permitted to engage in electioneering.

(c)    For the purposes of these Rules electioneering means any of the following kinds of conduct, either engaged in personally by the Candidate or by another person with the permission or authorisation of the Candidate:

i.    campaigning for the office of director or drawing attention to the fact the Candidate is seeking to be appointed as a director by:

A.    placing an advertisement in a newspaper, magazine or other similar publication;

B.    placing a placard or billboard in a location that can be seen by the general public;

C.    giving an interview that is transmitted to the general public by way of the media, including radio, television, blog or vlog;

D.    posting to a website or to a social media platform material that can be viewed by the general public; or

E.    sending hard copy or electronic communications to persons in circumstances that does not satisfy Rule 9(d)(ii); and

ii.    other conduct specified by the Board from time to time as notified by the Board to all Candidates and that applies equally to all Candidates.

(d)    For the avoidance of doubt electioneering does not include conduct that involves:

i.    a private conversation between the Candidate and a voting member (including by way of text message and/or email) that discusses the Candidature and does not contravene Rule 9(a);

ii.    sending a communication to multiple voting members, provided that:

A.    the proposed communication shall only be sent to voting members;

B.    the proposed communication shall be personally addressed to and sent to each recipient;

C.    the proposed communication shall only be sent to a recipient with whom the Candidate has a personal connection other than, or beyond, solely by virtue of the recipient being a member of the Club;

D.    the proposed communication must state prominently that:

“This communication is not to be made available to persons who are not voting members of the Club.”;

E.    any information in the proposed communication, other than that contained in the Candidate’s Statement of that Candidate, shall be provided to the Returning Officer at least three business days before it is to be sent to any voting members and shall only be sent to any voting members if the Returning Officer has not raised any objection to the proposed additional information prior to the expiration of the three business days;

F.    only one communication is to be sent by the Candidate (or on his or her behalf) to any given voting member in relation to the election; and

G.    the communication does not contravene Rule 9(a) above.

59    The Fourth Election Rules also increased the word limit for candidate statements from 150 to 300 words.

60    In January 2022, Mr Lawrence was advised that the Election Committee had determined that his skills, experience and attributes did not align with the “Board Credentials Statement” and therefore a qualification statement would not be applied to his candidate statement. When he asked for further information as to why it had reached this view, Mr Lawrence was informed by the company secretary that the deliberations of the Committee would not be disclosed.

61    Ms Kate Roffey, then the Chair of the board, subsequently wrote to all members, endorsing the election of only the incumbent director candidates (Mr David Robb, Mr John Trotter and Ms Freeman).

62    Mr Lawrence and the other non-incumbent candidate were unsuccessful.

2022 amendments to the constitution

63    The club undertook a review of its constitution in 2022.

64    Mr Rennick was the chair of the Constitutional Reform Working Group established by the board to lead the review, which resulted in various amendments being made in October 2022. The amendments were approved by a special resolution of members, with 84% of votes in favour of them.

65    The amendments included permitting the use of electronic voting for director elections (rather than postal ballots) and introduced director tenure limits.

2022 Supreme Court of Victoria proceeding

66    In August 2022, Mr Lawrence requested a copy of the MFC register of members pursuant to s 173 of the Act in order to communicate with them about the possible changes to the MFC constitution. The MFC provided Mr Lawrence with an Excel spreadsheet containing the names and postal addresses of its voting members, but declined to provide him with their email addresses, despite the fact that such addresses were in fact included in the register kept by the club.

67    In October 2022, Mr Lawrence then brought a proceeding in the Supreme Court of Victoria, the result of which was that the club was ordered to provide him with a copy of the register which included members’ email addresses. See Lawrence v Melbourne Football Club Ltd (2022) 71 VR 202 (Riordan J).

68    The club was also ordered to pay Mr Lawrence’s costs of the proceeding. Mr Rennick conceded in cross-examination that the club’s own costs of the proceeding was “a six-figure sum”.

The 2022/2023 election and the introduction of the register election rule

69    Shortly after the decision of the Supreme Court, the MFC enacted another set of election rules (Fifth Election Rules). These rules removed from the definition of what did not constitute electioneering conduct that involved “sending a communication to multiple voting members”, and imposed a new prohibition on candidates obtaining or using a copy of the MFC’s register of members as follows:

A Candidate may not request (or procure, permit or authorise another person to request) a copy of the Club’s register of members or use a register previously obtained to personally campaign or permit or authorise other persons to campaign on behalf of the Candidate for the office of Director.

70    Mr Lawrence, along with two other non-incumbent candidates, nominated for election to the board in December 2022. Again, Mr Lawrence went through the Candidate Assessment process, and was informed that the Candidate Assessment Committee (constituted by the Election Committee) had determined that his nomination did not align with the Board Credentials Statement.

71    Mr Lawrence withdrew his nomination in January 2023 because, as he deposed, he believed “it would have been futile to proceed with [his] nomination in circumstances of the election restrictions.”

The 2023/2024 election

72    On 1 September 2023, by a notice published on the club’s website, it was announced that Ms Sarah Robinson and Mr Geoff Porz had been appointed to the board, effective from 28 September 2023.

73    Prior to nominations opening for the 2023/2024 election, in October 2023, Mr Lawrence wrote to the MFC regarding his concerns about what he considered were the unfair and prejudicial effect of the Fifth Election Rules and the openness, fairness and transparency of the 2023 election. Throughout October and November 2023, he exchanged correspondence with the MFC about the rules and the conduct of elections.

74    In summary, Mr Lawrence remained concerned that the prohibition on electioneering; the candidate review process; the board’s practice of filling casual vacancies in advance of elections; and the board’s endorsement of incumbent candidates, were unfair and prejudicial to non-incumbent candidates. He sought “meaningful changes” to the election rules to address these concerns.

75    The MFC maintained that the election rules were designed so that the election process remained a matter dealt with “in the community of members and does not become a spectacle”, and that the board would not remove these “guiding principles” from the rules.

76    Nonetheless, the MFC thereafter made changes to the election rules (Sixth Election Rules), to increase the word limit of candidate statements and to allow further statements to be made by candidates and published on part of the MFC website (subject to vetting by the MFC’s returning officer).

77    Mr Lawrence and four other non-incumbent candidates nominated for election to the board in November 2023. None of them was successful.

Review of election rules in 2024

78    As outlined above at [24], Mr Rennick gave evidence that during his time as a director, it had been the board’s practice to perform a review of the election procedures each year to identify what had worked well and what could be improved.

79    The board and the Election Committee commenced their review of the 2023 election in early February 2024. As part of this review, the Election Committee recommended to the board a review of the election process and of the election rules more generally. The review involved consultations with various members of the club, including Mr Lawrence and “Deemocracy” (a group of club members in which Mr Lawrence was and is involved).

80    In April 2024, the board resolved to adopt the following changes to the election rules recommended by the Election Committee at the conclusion of the review, resulting in the Seventh Election Rules. Those rules relevantly:

(a)    contained a mandate that the returning officer appoint an appropriately qualified and resourced independent organisation to undertake the tasks of making recommendations as to the validity of votes cast, the counting of votes and the preparation of a report on the results of voting in connection with the conduct of the election;

(b)    contained a requirement that the returning officer not make a decision to impose sanctions on a candidate for breach of the election rules unless they have retained an appropriately qualified and experienced third party lawyer to review and provide advice on the reasons for the proposed decision, and the returning officer has considered that advice in good faith before making a decision;

(c)    provided for notice to be given to members when the call for nominations for election will be issued, increasing the nomination period to 14 days, and clarifying the information that must be provided to members;

(d)    prohibited the appointment of a director to fill a casual vacancy between 1 October (being about the time of the end of the men’s football season) and the next Annual General Meeting, unless there are extenuating circumstances that affect the board’s ability to function;

(e)    provided candidates with the option to participate in the Candidate Review process;

(f)    required a majority of the Candidate Assessment Committee to be appropriately experienced and skilled independent persons;

(g)    allowed candidates to post two written communications, as well as two video communications;

(h)    established an online election forum for the voting period to allow members and candidates to ask and respond to questions;

(i)    clarified that electioneering restrictions did not extend to material published on the club’s website;

(j)    allowed candidates to make posts on social media referring to their candidacy and which include their candidate statement.

81    In his second affidavit dated 18 April 2024, Mr Lawrence deposed that the Seventh Election Rules dealt with “some of the concerns [he had] been raising with the MFC over the last three to four years”.

82    In that regard, Mr Peters agreed that because the Candidate Assessment Committee now consisted of a majority of independent people, as Mr Lawrence had been seeking, he no longer pressed the candidate review complaint.

83    Mr Lawrence deposed that he nonetheless had “remaining concerns” about certain aspects of the Seventh Election Rules.

Electioneering restrictions (Rule 13(c))

84    Rule 13(c) provided:

(c)    Except as provided for under these Rules, Candidates are not permitted to engage in any of the following kinds of electioneering conduct, either engaged in personally by the Candidate or by another person with the permission or authorisation of the Candidate:

i.    campaigning for the office of Director or drawing attention to the fact the Candidate is seeking to be appointed as a Director by:

A.    placing an advertisement in a newspaper, magazine or other similar publication;

B.    placing a placard or billboard in a location that can be seen by the general public;

C.    giving an interview that is transmitted to the general public by way of the media, including radio, television, blog or vlog;

D.    posting to a website or to a social media platform material that can be viewed by the general public; and

E.    sending hard copy or electronic communications to persons in circumstances that does not satisfy these Rules; and

ii.    other conduct specified by the Board from time to time as notified by the Board to all Candidates and that applies equally to all Candidates.

85    Mr Lawrence deposed that his main “concern” was that part of Rule 13(c) (sub-paragraph (i)(C) and (i)(D)) prohibited candidates from giving media interviews and using websites and social media that can be viewed by the general public.

86    Mr Lawrence contended that Rule 13(c), when read with the other Rules, impinged on the ability of candidates to properly communicate with members, and affected the ability of members to obtain information from candidates about matters relevant to the exercise of their vote.

Disparagement (Rule 13(b)(i))

87    Rule 13(b)(i) relevantly stated that:

(b)    Election material, Candidate Statements and any other written or oral statement by or on behalf of a Nominee or a Candidate must not:

(i)    Disparage or otherwise reflect adversely on the standing of the Club or its players, Members, Directors, officers, staff, Nominees or Candidates.

88    Mr Lawrence deposed that in his view, the words “disparage or otherwise reflect adversely on the standing of” were so broad as to make it difficult for candidates to know what statements would or would not be in breach of the rules, and that they prevented candidates from being able to make statements which appropriately scrutinised and criticised the incumbent board and its management of the affairs of the club, so that members could make informed choices. Such a rule would, Mr Lawrence contended, “patently” favour incumbent directors.

Register of members (Rule 13(e))

89    Rule 13(e) provided:

A Candidate may not request (or procure, permit or authorise another person to request) a copy of the Club’s register of members or use a register previously obtained to personally campaign or permit or authorise other persons to campaign on behalf of the Candidate for the office of Director.

90    As outlined above at [69], this rule was introduced in late 2022 after Mr Lawrence brought proceedings in the Supreme Court of Victoria to obtain a copy of the register of MFC members and their email addresses.

91    Mr Lawrence’s solicitors sent a letter to the club’s solicitors on 18 October 2023 objecting to Rule 13(f) (as Rule 13(e) then was). In his second affidavit, Mr Lawrence said that Rule 13(e) impeded the right of members to inspect the register maintained by the MFC. Mr Lawrence argued that if Rule 13(e) was allowed to remain, it would effectively nullify that right and the effect of the decision in the Supreme Court.

Call for nominations (Rule 5(b))

92    Rule 5(b) of the Seventh Election Rules provided:

The Call for Nominations shall be published on the Club’s website and in at least one major Australian newspaper on a date to be determined by the Board and may be publicised in such manner as the Board may determine from time to time. The Call for Nominations must also be notified to the Members who have consented to be contacted by electronic message to an electronic address nominated by the Member.

93    While Mr Lawrence acknowledged the changes made by the board to this rule, he said that not all members would receive notification of the call for nominations for election to the board, because it appeared that the members who had not consented to receiving emails from the club would not receive any individual notification by other possible means (for example, post or fax).

Casual vacancies (Rule 5(g))

94    Rule 5(g) provided:

The Board will not appoint a person to be a Director under rule 3.3 of the Constitution at any time between (i) 1 October and (ii) the next annual general meeting of the Club. The preceding restriction will not apply if there have been casual vacancies and casual appointments are considered necessary for the Board to function properly as a governing body in that period.

95    Mr Lawrence deposed that he “acknowledged” the board’s amendment to its practice regarding filling casual vacancies prior to the election, but he contended nonetheless that the rule permitted the board to encourage retiring directors to step down before 1 October and the conclusion of the men’s season and to replace those directors with the board’s preferred candidates. Mr Lawrence said that the rule should “start with an overarching proposition that elected [b]oard members should, absent special circumstances, serve their time from general meeting to annual general meeting”, as contemplated in the constitution.

FURTHER AMENDMENTS TO THE RULES

96    I have set out above the facts which explain the relevant exchanges between the parties and the changes that were made by the club to the election rules and practices prior to the commencement of the trial.

97    As that factual history makes clear, the relevant rules the subject of the controversy when the trial commenced were the Seventh Election Rules.

98    The hearing of the proceeding was somewhat of a “moveable feast”, because further amendments were made to the rules during, and after, the trial, which had the effect of further narrowing the matters about which Mr Lawrence complained.

Removal of register of members rule during the trial

99    On the first day of the trial, it emerged that the MFC had not anticipated Mr Lawrence’s case, articulated by Mr Peters in opening, that Rule 13(e), which prohibited a member from obtaining or using the register of members for the purpose of campaigning, was oppressive and contrary to s 173 of the Act. (That section provides that a company must allow anyone to inspect its register, and must provide a copy of its register to anyone upon application so long as the person is not seeking access to the register for a “prescribed purpose”).

100    Mr Borsky submitted that the club had not been put on notice of any such allegation, and that, as a matter of procedural fairness, Mr Lawrence should not be permitted to run the point.

101    Mr Borsky submitted that nothing in the originating process or the list of issues jointly filed by the parties referred to or could be understood as including the register rule as being an issue in dispute.

102    Mr Peters submitted that the claim in paragraph 1(d) of the originating process that the rules’ prohibition on “electioneering” was oppressive encompassed the specific prohibition on a candidate obtaining or using the register of members for campaigning, and maintained that the club had been put on notice of this by way of correspondence, Mr Lawrence’s affidavits and submissions.

103    On the second day of the trial (2 May 2024) Mr Peters sought leave to amend the originating process and the joint list of issues so as to include the register rule as part of his case and, as he put it, “make patent what [Mr Lawrence says] was already an issue”.

104    In response, the MFC filed a further affidavit of Mr Rennick affirmed that day, in which he gave the following evidence:

3.     I was taken by surprise by the submissions made on behalf of Mr Lawrence that rule 13(e) … is oppressive because of inconsistency with the Corporations Act 2001 (Cth).

4.    I did not address rule 13(e) … in my evidence because so far as I have observed or been told by any other member of the Board, neither Mr Lawrence or anyone else raised rule 13(e) in the [2024 review of the election rules] or at any time since this proceeding commenced in December 2023 and prior to the preparation and filing of my 4 March Affidavit and 5 April Affidavit.

5.    As a result of the above, rule 13(e) has not been discussed by the Board at any time since the commencement of this proceeding.

6.    If rule 13(e) had been raised as a concern by anyone since this proceeding commenced in December 2023 and prior to the preparation and filing of my 5 April Affidavit, I anticipate based on my experience that the Board would have obtained member feedback as part of the [2024 review of the election rules], taken advice in respect of the rule, and considered whether or not to remove or amend the rule as part of the outcome of the [review].

105    Mr Rennick was cross-examined about that evidence and was taken to relevant passages of correspondence between the parties, as well as to Mr Lawrence’s affidavits and submissions. During the cross-examination, I asked Mr Rennick about a particular paragraph in Mr Lawrence’s 18 April 2024 affidavit as follows:

[O’CALLAGHAN J]:     Yes. And you – perhaps if you start at 35. Rule 13(e) is set out there. Mr Lawrence then deposes to events that took place before that 18 October letter that you asked about. [Paragraph] 37 says the – his solicitors objected to 13(e), as it was, and then Mr Lawrence says:

Rule 13(e) impedes the right allowing members to inspect the register of members maintained by MFC. This right was confirmed by the court and the Supreme Court. If rule 13(e) is allowed to remain in the rules, this will effectively nullify those rights and the decision in the Supreme Court proceeding.

Doesn’t it rather suggest that he was making it an issue?---Well, it may well, your Honour.

I’m not suggesting that, looking at it now – I don’t mean anything other than to ask you the question. Looking at those words now, doesn’t that rather suggest that he was?---Yes, it does.

(emphasis added)

106    In those circumstances, I considered that the appropriate course was to adjourn the hearing to allow the board to take the steps it would have taken had it known that Rule 13(e) was in issue, namely taking advice and convening a meeting to consider whether to amend or remove the rule.

107    Following the adjournment, the MFC filed a further affidavit of Mr Rennick affirmed on 10 May 2024.

108    In that affidavit, Mr Rennick deposed that Rule 13(e) had been introduced following the outcome of the Supreme Court proceeding, and after the club received a large volume of complaints from members about the fact that their personal contact information had been disclosed.

109    Mr Rennick gave evidence that, following the adjournment of the hearing, the board obtained feedback in relation to the rule from members who had previously been involved in the review of the 2023 election rules.

110    He further deposed that on 8 May 2024, the board convened to consider whether Rule 13(e) should be amended. Mr Rennick said that the board was concerned about striking a balance between protecting the privacy of its members and responding to their concerns and feedback in this regard, and ensuring that the election rules were not seen to be inconsistent with a member’s legislative right to access or use a copy of the members’ register. The board ultimately resolved to remove rule 13(e) from the rules and to insert a new subparagraph to rule 13(d) as follows:

(d)     For the avoidance of doubt, the electioneering conduct restricted by the preceding paragraph does not include conduct that otherwise complies with these Rules and involves:

…

iv.     using information contained in a lawfully obtained copy of the Club’s register of members in accordance with section 177(1A) of the Act.

111    The amendment meant that Rule 13(e) was no longer in issue.

Amendment to disparagement rule after the trial

112    The trial resumed on 13 May 2024.

113    By that time, it was apparent that the remaining substantive issue between the parties regarding rule 13(b)(i) — which, it will be recalled, prohibited candidates from making statements that “disparage or otherwise reflect adversely on the standing of the Club or its players, Members, Directors, officers, staff, Nominees or Candidate” — was one of interpretation.

114    Mr Lawrence submitted that, because of the disparagement rule, “scrutiny and criticism of the incumbent board’s management of the Club, and information about how a candidate proposes to improve governance and management, is prohibited or at least, severely restricted”, and that the rule therefore “prevents examination and evaluation of the Club’s and Board’s performance”.

115    The MFC submitted that Mr Lawrence was adopting too broad a construction of rule 13(b)(i) which was inconsistent with the express purpose of the election rules (namely, to provide information to ensure a fair and open election and to ensure election material and communication is directed to members in a transparent and egalitarian manner). In the MFC’s submission:

… the meaning of [“disparage or otherwise reflect adversely”] should be informed by what a reasonable person, mindful of the context of a contested election, is likely to perceive as being disparaging communications or communications that reflect adversely upon the Club. That being so, the provision would not be construed in a way so as to prevent criticism of the Club or incumbent Board’s performance, but only as preventing comments of a disparaging or belittling nature that go beyond reasonable or constructive criticism (eg. by ad hominem attack).

(emphasis added)

116    In cross-examination, Mr Rennick was taken to the above paragraph of the MFC’s opening submissions and said that he would be content with a rule which said what was expressed in that paragraph. When asked how he would define “disparage and adversely affect” Mr Rennick said “belittling”, and accepted that this would not relate to “fair criticism”.

117    In their closing written submissions, counsel for Mr Lawrence invited the MFC to enact an explicit rule to the effect set out in the above paragraph of its submissions. When I raised this with Mr Borsky in the course of his address, he said that he would “find it difficult to resist a proposition” that including a “for the avoidance of doubt” provision may make “even clearer” the construction of the disparagement rule which the club submitted was the correct one. Mr Borsky later told me that he had obtained instructions from the MFC that if Mr Lawrence were to seek or propose a clarification to rule 13(b)(i) to the effect of the paragraph above (namely, that it did not prevent reasonable or constructive criticism), the club would not oppose it.

118    At the conclusion of the hearing, I accordingly asked counsel to confer as to the possible wording of a clarification to this effect for consideration by the board.

119    On 19 June 2024, the MFC filed a further affidavit of Mr Rennick in which he deposed that the club’s solicitors sent a letter to Mr Lawrence’s solicitors on 24 May 2024 in the following terms (omitting formal parts):

We refer to his Honour’s invitation on the final day of trial for the parties to confer on a potential clarification to the wording of rule 13(b)(i) of the Current Election Rules relating to non-disparagement.

We are instructed that the Club would be willing to clarify the wording of rule 13(b)(i) as follows (in mark up against the current wording):

disparage or otherwise reflect adversely on the standing of the Club or its players, Members, Directors, officers, staff, Nominees or Candidates (noting for the avoidance of doubt that this rule does not prevent reasonable or constructive criticism of the Club or its on-field performance, Members, Directors, officers, staff, Nominees or Candidates);

Please confirm by 4pm, Thursday 30 May 2024 whether your client agrees to the proposed clarification in lieu of striking out rule 13(b)(i) (being the relief presently sought in paragraph 2(a) of the plaintiff’s proposed orders set out in Schedule C to your client’s closing submissions).

120    On 29 May 2024, Mr Lawrence’s solicitors sent a letter to the club’s solicitors in response which said as follows (omitting formal parts):

We refer to your letter dated 24 May 2024.

We are instructed that our client does not agree to your client’s proposed amendment to rule 13(b)(i) of the Current Election Rules in lieu of striking out that rule, being the relief sought in paragraph 2(a) of his proposed orders.

We are further instructed that if your client agrees to amend rule 13(b)(i) as set out below, then our client will accept that wording in lieu of rule 13(b)(i) being struck out:

Election material, Candidate Statements and any other written or oral statement by or on behalf of a Nominee or Candidate must not:

(i)    disparage or otherwise reflect adversely on the standing of the Club or its players, Members, Directors, officers, staff, Nominees or Candidates go beyond reasonable constructive criticism of the Club or its on-field performance, Members, Directors, officers, staff, Nominees or Candidates (for example, an ad hominem attack).

Please let us know whether your client agrees to amend rule 13(b)(i) as described above by no later than 4.00pm on 31 May 2024.

121    Mr Rennick deposed that on 6 June 2024, in circumstances where the parties had not reached agreement, the board convened and resolved to amend rule 13(b)(i) consistently with the amendment proposed by the club in its correspondence of 24 May 2024 extracted above.

REMAINING ISSUES

122    As the lengthy factual and procedural history of this proceeding demonstrates, Mr Lawrence’s dogged efforts to persuade the MFC to change its election rules and practices have already resulted in the MFC adopting many of the changes to the club’s rules along the lines of those for which he contended.

123    Those changes, along with a number of sensible concessions made by Mr Lawrence and the MFC, meant that very little of the case, as opened, remained to be determined.

124    Mr Lawrence’s originating process sought (a) a declaration under s 21 of the Federal Court of Australia Act 1976 (Cth) that, “pursuant to section 232 of the Corporations Act” certain conduct of the club was oppressive; and (b) orders under s 233 of the Act that the election rules be amended accordingly. The precise form of relief sought is set out at [5] to [6] above, and there is no need to repeat it here.

125    By the time of closing submissions, Mr Lawrence instead sought the following relief (as set out in Schedule C attached to his written closing submissions):

1.    Pursuant to s 232 of the Corporations Act 2001 (Cth) (Corporations Act), Melbourne Football Club Limited (MFC)’s conduct of its affairs in relation to elections for its board of directors has been since 2022, and continues to be:

a.    contrary to the interests of the members as a whole; and

b.    oppressive to, unfairly prejudicial to and unfairly discriminatory against Peter Lawrence and other non-preferred candidates seeking election to the board of directors of MFC.

2.    Pursuant to s 233 of the Corporations Act, the following paragraphs of the MFC Election Rules dated 8 May 2024 be struck out:

a.    paragraph 13(b)(i);

b.    paragraph 13(c)(i)(C);

c.    paragraph 13(c)(i)(D)

d.    the words in parathensis [sic] in paragraph 13(d)(ii).

126    Although Mr Peters did not formally seek leave to amend the originating process accordingly, I will make such an order, because (sensibly enough) no objection was made to the final form of relief being articulated in that way.

127    The MFC submitted that, to the extent that paragraph 1 of Mr Lawrence’s proposed orders still sought declaratory relief, such an application was misconceived. In the end, for reasons that no longer matter, Mr Peters accepted that proposed order 1 set out in Schedule C to his written closing submissions was unnecessary.

128    That leaves paragraph 2 of the final form of relief sought in Schedule C. By that paragraph, Mr Lawrence seeks an order that the following paragraphs of the election rules be struck out:

(a)    paragraph 13(b)(i), or the “disparagement” rule, which, at 8 May 2024, provided as follows (noting it has now been amended as outlined above):

(b)    Election material, Candidate Statements and any other written or oral statement by or on behalf of a Nominee or Candidate must not:

i.    disparage or otherwise reflect adversely on the standing of the Club or its players, Members, Directors, officers, staff, Nominees or Candidates;

(b)    paragraphs 13(c)(i)(C) and (D) which provide:

(c)    Except as provided for under these Rules, Candidates are not permitted to engage in any of the following kinds of electioneering conduct, either engaged in personally by the Candidate or by another person with the permission or authorisation of the Candidate:

i.    campaigning for the office of Director or drawing attention to the fact the Candidate is seeking to be appointed as a Director by:

…

C.    giving an interview that is transmitted to the general public by way of the media, including radio, television, blog or vlog;

D.    posting to a website or to a social media platform material that can be viewed by the general public;

(c)    the words in parentheses in paragraph 13(d)(ii) which provides:

(d)    For the avoidance of doubt, the electioneering conduct restricted by the preceding paragraph does not include conduct that otherwise complies with these Rules and involves:

…

ii.    publishing on the Candidate’s social media platform account the fact that they are a Candidate and the Candidate Statement of that person (in doing so the comments function must be turned off in connection with that publication and reference may be made that if a Member has any questions or comments concerning the election they may refer to the Club’s online election forum);

129    This ultimately limited his claim for relief to orders for the removal of specific aspects of the election rules which restrict electioneering, namely the rule against disparagement, the rule prohibiting general campaigning through media interviews and social media; and the requirement that a candidate turn off the comments function and direct questions and comments to the club’s online election forum when referring to their candidacy and publishing their candidate statement on social media.

130    The result is that the only remaining issue necessary for me to determine is whether the affairs of the MFC have been conducted in a manner contrary to the interests of members as a whole or oppressively to Mr Lawrence and other non-preferred candidates by reason of the restrictions, as they now exist in the current version of the election rules, on “electioneering”.

131    Section 232 of the Act relevantly provides that the court may make an order under s 233 if:

(a)    the conduct of a company’s affairs; or

(b)    an actual or proposed act or omission by or on behalf of a company; or

(c)    a resolution, or a proposed resolution, of members or a class of members of a company;

is either:

(d)    contrary to the interests of the members as a whole; or

(e)    oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity.

132    Section 233 of the Act relevantly provides:

(1)    The Court can make any order under this section that it considers appropriate in relation to the company, including an order:

…

(c)    regulating the conduct of the company’s affairs in the future;

…

(i)    restraining a person from engaging in specified conduct or from doing a specified act;

…

(j)    requiring a person to do a specified act.

133    In RBC Investor Services Australia Nominees Pty Ltd v Brickworks Ltd [2017] FCA 756; (2017) 348 ALR 605, Jagot J emphasised that the role of the court in oppression actions where evaluative decisions are challenged is not to step into the shoes of the directors and decide for itself what it thinks is in the company’s best interests, recognising that directors routinely weigh competing considerations about which reasonable minds can and do differ. At 616 [42] her Honour said:

The touchstone of oppression, that conduct be so unfair that reasonable directors who consider the matter would not have thought the conduct or decision fair, may appear circular but is designed to reinforce that the role of the court is not to step into the shoes of the directors and unilaterally decide what it thinks to be in the best interests of the company as a whole. The courts recognise that it is the responsibility of the directors to weigh the competing considerations with which they will be routinely confronted and determine what is in the best interests of the company as whole. They recognise also that as the task of the directors is evaluative it is necessarily one about which reasonable minds may differ. In performing its own evaluation, accordingly, the courts do not merely substitute what appears to them to be the preferable commercial decision. As Mansfield J summarised in Territory Realty Pty Ltd v Garraway [2009] FCA 292 at [312]:

The authorities indicate that the Court should not readily find either s 232(d) or (e) is made out: Edwards v Idaville Pty Ltd (1996) 22 ACSR 1. Such a finding requires consideration of all the circumstances, viewed cumulatively, but not with a hypercritical approach, as the measure is the standard of reasonable directors: De Tocqueville Private Equity Pty Ltd v Linden & Conway Ltd (2006) 59 ACSR 587; [2006] FCA 1309. It is not a finding to be made because the Court may, on the information available, disagree with the decision of the directors, or because the wisdom of hindsight may show that the decision of the directors was unwise and perhaps grossly so, or because the directors or management did not conduct the affairs of the company as well as the Court considers they may have: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (1998) 28 ACSR 688; [1998] NSWSC 413. As Murray J said in Re Spargos Mining NL (1990) 3 ACSR 1 at 44, the Court should not in substance adopt an approach to those provisions without clear justification, so that it does not simply take “over the management of the company”.

134    In New South Wales Rugby League Ltd v Wayde (1985) 1 NSWLR 86 the New South Wales Court of Appeal overturned the primary judge’s finding that a decision of the Rugby League’s board of directors to refuse to allow a club associated with the respondent entry into a NSW rugby competition was oppressive or contrary to the interests of the members as a whole. The Court (Street CJ, Kirby P and Hope JA) said at 100–102:

It would not follow that, because a decision prejudicially affected a particular club, the decision could not reasonably be considered as being in the interests of the members of the league as a whole. The decision of the directors would have to be based upon relevant considerations, the decision could not be simply arbitrary or capricious. But if the directors act bona fide without collateral motive and have regard to the relevant considerations; balancing the interests of the members of the league as a whole as against the interests of a particular member, and if there is material upon which they can reasonably come to such a decision, the directors are entitled to make a decision which would be very prejudicial to that particular member, even to the point of destroying it.

…

Role of the courts in cases such as this:

Necessarily, this conclusion does not involve the court in pronouncing on the merits of the decision made by the directors … decisions on the best interests of the members of the league as a whole (and thus on the organization of the professional game of rugby league football) are properly made by the directors of the league familiar with it and deeply involved in its organization; not by the courts. The directors have the power to make the relevant decisions by reason of the articles of association. Indeed, prior to incorporation, these articles were specifically amended precisely to clarify this power of the directors and, in the amended form, became the articles of association of the league upon its incorporation. Courts may only interfere in the directors’ decisions, relevantly, where oppression or unfair prejudice is shown. Whilst it is true that the Code should be given a beneficial construction and not unduly narrowed by judicial decisions, the terms of s 320 must not lead courts into assuming the management of corporations, substituting their decisions and assessments for those of directors, who can be expected to have much greater knowledge and more time and expertise at their disposal to evaluate the best interests of the members of the corporation as a whole.

135    In Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459, the High Court dismissed an appeal against that decision, on the basis that it had not been shown that the relevant decisions of the board were such that no board acting reasonably could have made them. The plurality (Mason ACJ, Wilson, Deane and Dawson JJ) at 467–468 said:

Given the special expertise and experience of the Board, the bona fide and proper exercise of the power in pursuit of the purpose for which it was conferred and the caution which a court must exercise in determining an application under s. 320 of the Code in order to avoid an unwarranted assumption of the responsibility for management of the company, the appellants faced a difficult task in seeking to prove that the decisions in question were unfairly prejudicial to Wests and therefore not in the overall interests of the members as a whole. It has not been shown that those decisions of the Board were such that no Board acting reasonably could have made them. The effect of those decisions on Wests was harsh indeed. It has not, however, been shown that they were oppressive or unfairly prejudicial or discriminatory or that their effect was such as to warrant the conclusion that the affairs of the League were or are being conducted in a manner that was or is oppressive or unfairly prejudicial.

136    It follows, as counsel for the MFC submitted, that where what is sought to be impugned are evaluative decisions made by the company’s board as to what is in the company’s best interests, it must ordinarily be shown that there has been a lack of good faith or that the decision was one which no reasonable board could have reached in order to warrant a finding that the conditions of s 232 are satisfied.

137    Counsel for Mr Lawrence submitted that the reasoning of Brennan J in Wayde has subsequently found favour with lower courts. The particular passage from his Honour’s reasons upon which Mr Lawrence relied is at 472–473:

The question of unfairness is one of fact and degree which s 320 requires the court to determine, but not without regard to the view which the directors themselves have formed and not without allowing for any special skill, knowledge and acumen possessed by the directors. The operation of s 320 may be attracted to a decision made by directors which is made in good faith for a purpose within the directors’ power but which reasonable directors would think to be unfair. The test of unfairness is objective and it is necessary, though difficult, to postulate a standard of reasonable directors possessed of any special skill, knowledge or acumen possessed by the directors. The test assumes (whether it be the fact or not) that reasonable directors weigh the furthering of the corporate object against the disadvantage, disability or burden which their decisions will impose, and address their minds to the question whether a proposed decision is unfair. The court must determine whether reasonable directors, possessing any special skill, knowledge or acumen possessed by the directors and having in mind the importance of furthering the corporate object on the one hand and the disadvantage, disability or burden which their decision will impose on a member on the other hand, would have decided that it was unfair to make that decision.

(emphasis added)

138    Mr Peters contended that in that passage, and in the emphasised part of it in particular, Brennan J articulated a different test to that posited by the plurality, and that it has subsequently been applied in other decisions, citing Hylepin Pty Ltd v Doshay Pty Ltd (2021) 288 FCR 104 at 128–129 [125]–[126], 155 [269] (Markovic, Banks-Smith and Anderson JJ); Wilmar Sugar Australia Ltd v MacKay Sugar Ltd [2017] FCAFC 40; (2017) 345 ALR 174 at 179 [12] (Dowsett, Jagot and White JJ); MacKay Sugar Ltd v Wilmar Sugar Australia Ltd [2016] FCAFC 133; (2016) 338 ALR 374 at 377 [9] (Gilmour, Jagot and White JJ); Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55; (2014) 314 ALR 62 at 65–66 [8]–[9] (Siopis, Rares and Davies JJ); Parker v Auswild [2022] VSCA 8; (2022) 403 ALR 111 at 140 [129]–[130] (Ferguson CJ, Kennedy JA and Garde AJA); Knights Quest Pty Ltd v Daiwa Can Company [2018] VSCA 349; (2018) 366 ALR 557 at 588–589 [130] and footnotes 102, 104 (Beach, Kyrou and Hargrave JJA); Joint v Stephens [2008] VSCA 210; (2008) 26 ACLC 1467 at 1496–1497 [134] (Nettle, Ashley and Neave JJA); Saykan v Elhan [2006] VSCA 230 at [33] (Nettle JA); Aqua-Max Pty Ltd v MT Associates Pty Ltd (2001) 3 VR 473 at 482 [61] (Brooking, Charles and Chernov JJA); Soulos v Pagones [2023] NSWCA 243 at [174]–[176] (Ward P, with whom Meagher and Mitchelmore JJA agreed); Tzavaras v Tzavaras [2023] NSWCA 168 at [73]–[74] (Gleeson, Adamson JJA, and Griffiths AJA); Wambo Coal Pty Ltd v Sumiseki Materials Co Ltd (2014) 88 NSWLR 689 at 739–741 [225] (Barrett JA, with whom Bathurst CJ and Beazley P agreed).

139    Mr Peters submitted that “[i]n all the circumstances … the test which this Court ought apply in this proceeding is the test articulated by Brennan J in Wayde”.

140    I am unable to accept that submission. Assuming that there is a difference between the reasoning of the plurality in Wayde and the observations of Brennan J, I am bound to follow the plurality, however many times the test articulated by Brennan J has been repeated by courts of intermediate appeal.

141    As Mr Rennick in substance deposed, the electioneering rules are aimed at ensuring the election process is a fair one which does not favour wealthy candidates able to fund a large-scale public campaign. The rules also serve to protect the club and candidates against ad hominem attacks that may deter good candidates from standing for election and cause damage to the club’s brand and reputation. He also explained that the board had due regard to the competing imperative of ensuring candidates have a reasonable opportunity to communicate with members so that members can make an informed choice; that the election rules reflect the board’s judgment as to what is an appropriate balance between those competing objectives; and that in making that judgment, the board has responsibly taken into account member feedback including that of Mr Lawrence. None of that evidence was challenged, and I accept it.

142    In my view, the directors of the club acted bona fide, without collateral motive. They had regard to relevant considerations, and they balanced the interests of the members of the club as a whole as against the interests of a particular member (here, Mr Lawrence). In my view, the reasons given by the board in respect of the electioneering rules are founded upon matters which permitted it reasonably to adopt the electioneering rules in their current form. That is to say, the decisions to amend or keep in place, as the case may be, the election rules which restrict electioneering, namely the rule against disparagement, the rule prohibiting general campaigning through media interviews and social media; and the requirement that a candidate turn off the comments function and direct questions and comments to the club’s online election forum when referring to their candidacy and publishing their candidate statement on social media, were and are not “oppressive”. That would be so, as the cases make clear, even if their consequence is “very prejudicial to that particular member” or (to use the plurality’s expression in Wayde in the High Court) “was harsh indeed”. Here, Mr Lawrence has not demonstrated that the impugned decisions of the board were such that no board acting reasonably could have made them.

143    Mr Lawrence, of course, has a different view about these questions. He says, for example, that candidates seeking election to the board should be free to give media interviews and use and have unrestricted access to websites and social media that can be viewed by the general public. And those views are not unreasonable. But, as the cases make clear, it is not the court’s role in oppression cases to be an arbiter of competing views about such matters.

144    I should briefly mention another (albeit faintly pressed) submission made on behalf of Mr Lawrence. It was submitted that his original, now abandoned, complaints in relation to the filling of casual vacancies, notice of nominations and board endorsements and so on, are still relevant because they are said to form part of “the totality of the circumstances” of the alleged oppressive conduct, and should therefore be taken into account when determining whether the electioneering rules are oppressive. I do not agree. In the context of this case, such considerations may be relevant when it comes to considering questions about the costs of the proceeding, but they have no bearing in my view on the remaining allegations of oppression.

145    In closing submissions, Mr Peters also referred to (a) the fact that certain members of the board had attempted to dissuade Mr Lawrence from contesting elections; and (b) the decision of the board to no longer accept donations or player sponsorship from Mr Lawrence, which he described as the club’s “punishment” of Mr Lawrence for his continuing to run in elections. It was submitted (again, faintly) that both these actions amounted to conduct that should be taken into account in determining whether the electioneering rules were oppressive as alleged.

146    I do not agree. First, the allegations about this conduct formed no part of the relief sought by Mr Lawrence in the proposed orders or, for that matter, the originating process or joint list of issues. Secondly, it is difficult to understand how such conduct could be relevant to the only remaining issue of whether the electioneering rules were oppressive and ought to be struck out.

147    I should also mention the disparagement rule. As I have explained, Mr Lawrence did not accept that the amendment made to the rule by the board on 6 June 2024 met his concerns, but I confess that I am unable to understand why. In any event, the new rule is not, strictly speaking, the subject of any controversy that I am required to decide.

Relevance of election rules of other AFL clubs

148    I should say something briefly about one issue that occupied some considerable time at the hearing. Both parties tendered into evidence the rules of various other AFL football clubs, and went through them in submissions in some detail, with a view to establishing that the relevant rules of the MFC were, or were not, reasonable. In my view, and intending no disrespect to the parties, that was to invite me to conduct a wholly arid exercise, and I decline to have regard to them.

CONCLUSION

149    For those reasons, the amended originating process is to be dismissed.

150    If the parties are unable to resolve the question of costs between themselves, I will order that they file written submissions on the issue, which I will decide on the papers.

Associate:

Dated:    22 August 2024