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Armstrong, Rowan --- "Wrongfully ‘Red’ or ‘Yellow-Carded’ from a Sport or Competition: Applying the Restraint of Trade Doctrine to Hold S ports Governing Bodies to Account" [2009] NZLawStuJl 4; (2009) 2 NZLSJ 31

Last Updated: 14 January 2013

WRONGFULLY ‘RED’ OR ‘YELLOW-CARDED’ FROM A SPORT OR COMPETITION:

APPLYING THE RESTRAINT OF TRADE DOCTRINE TO HOLD SPORTS GOVERNING BODIES TO ACCOUNT

ROWAN ARMSTRONG^∗

Introduction

Many sports can now be considered ‘big business’. Tagdell JA recognised this when his Honour stated that sports clubs are “conducting an entertainment business on a large scale”.¹ With the commercialisation and commodification of sport becoming increasingly prevalent, there is an escalating desire for sports governing bodies to exercise greater control over the actions of players, clubs and other participants. Probably in many cases governing bodies see this as necessary to protect and enhance their credibility, to maximise potential revenues, and to further promote the sport in an environment of fierce competition. However when a governing body acts in a way to prevent or limit a participant’s ability to earn a living from a sport, by imposing an obligation going beyond that which is reasonably necessary, the act constitutes an unreasonable restraint of trade and is void. To cast an analogy with a rugby union referee, sports governing bodies may in some circumstances, if challenged, be wrongfully handing out ‘red’ or

‘yellow’ cards. In this professional age of sport it is therefore desirable, if not necessary, for interested parties to be aware of how they can apply the restraint of trade doctrine to hold a sports governing body to account.

The term ‘restraint of trade,’ has recently been thrust into the media spotlight after speculation that the conduct of a number of governing bodies may be in breach of the doctrine. Probably the best known situation was the stance taken by national cricket bodies (under the umbrella of the International Cricket Council (ICC)) who, in 2008, threatened to exclude those players involved in the ‘rebel’ Twenty20

Indian Cricket League (ICL) from playing all other ICC-sanctioned

^∗ _{LLB (Hons)/BCom, University of Canterbury.}

¹ Australian Football League v Carlton Football Club Ltd [1998] 2 VR 546, 548.

32 The New Zealand Law Students’ Journal (2009) 2 NZLSJ

forms of cricket.² If this position is maintained, it would effectively put the players who participated in the rebel league out of full time employment.

Another situation where athletes may invoke the doctrine is in response to a governing body preventing them from competing in a sport or competition after committing a doping infringement. For example, the enforcement and legality of the British Olympic Association’s (BOA) byelaw 25 has come into question. This stipulates that:

[a]ny person who has been found guilty of a doping offence... shall not [subject to stipulated grounds of appeal] thereafter be eligible for consideration as a member of a Team Great Britain or be considered eligible by the BOA to receive or to continue to benefit from any accreditation as a member of the Team Great Britain delegation for or in relation to any Olympic Games...³

Christine Ohuruogu (the 2006 Commonwealth 400 metres champion), successfully appealed the enforcement of this byelaw to be granted permission to compete at the 2008 Beijing Olympic Games.⁴ However British sprinter, Dwain Chambers, who served a two year suspension for doping, was not so fortunate. Chambers did not fall within any of the stipulated grounds for appeal prescribed by the byelaw and therefore the only realistic route for him⁵ was to challenge its legality on the basis that it constituted an unreasonable restraint of trade. Mackay J, in the English High Court, refused to grant Chambers an injunction to temporarily suspend the BOA’s byelaw in the absence of a full hearing.⁶

² See Part C (1) of this article, in particular commentary in footnotes n 89-108, for comprehensive analysis of this situation.

^{3 <http://www.olympics.org.uk/documents/Eligibility%20bye%20law%20(Final%20No}

v%202004).pdf>. The stipulated grounds of appeal are contained in byelaw 25(6)(5).

^{4 The Daily Mail, ‘Christine Ohuruogu Cleared to Run in Olympics after Lifetime Ban}

Drug is Lifted’(2008) Daily Mail Sport, <http://www.dailymail.co.uk/pages/live/articles/

^{sport/sport.html?in_article_id=496693&in_page_id=1771> at 29 January 2008.}

⁵ The Guardian, ‘BOA Ready for Chambers Challenge’(2008) The Guardian Sport,

^{<http://sport.guardian.co.uk/athletics/story/ 0,,2262362,00.html> at 5 March 2008. Any}

appeal to the Court of Arbitration for Sport was unlikely to have been heard before the

^{Beijing Olympics started on 8 August 2008.}

⁶ Chambers v British Olympic Association [2008] EWHC 2028 (QB). MacKay J noted at [66] that “many people inside and outside the sport, would see [this byelaw as unlawful].... In my judgment, it would take a much better case than the claimant presents to persuade me

Wrongfully ‘Red’ or ‘Yellow-Carded’ 33

Aside from restrictions on participating in a sport or competition, there has also been recent speculation that salary caps, as a form of labour market control, may constitute an unreasonable restraint of trade.⁷ This matter has yet to be determined and one can only wait with interest until inevitably an aggrieved sportsperson challenges a governing body for not being able to earn the amount that they deem themselves to be worth.

This article will further explore and expand on these situations, with an aim to provide interested parties with a practical analysis as to the scope and circumstances in which a restraint of trade claim may ultimately succeed. As the categories of restraint of trade are “not exhausted and never closed”⁸ it is simply not possible to foresee every situation in which a challenge could successfully be brought. Nevertheless it is fundamental in this professional age of sport for interested parties to have an appreciation of the principles and the established circumstances in which the doctrine may be called upon to challenge the authority of a self-regulatory⁹ governing body. This article will significantly analyse the Australian and English restraint of trade cases. As the doctrine is premised in the common law, these authorities hold a great deal of influence in the New Zealand courts.

A. Restraint of Trade as a Mechanism for Challenge

It is important to emphasise from the outset that restraint of trade is merely one mechanism available to hold a sports governing body to account. Judicial review,¹⁰ a contractual cause of action,¹¹ interference

to overturn the status quo, that is to say, the validity of this byelaw at this stage and thereby compel his selection”.

^{7 For example see: M Beloff QC, ‘Gaming and Doping Continue to Threaten}

Sport’(2007) The Telegraph Sport, <http://www.telegraph.co.uk/sport/main.jhtml ?xml=/ sport/2007/12/26/sodrug126.xml> at 25 December 2007. For further information see commentary below n 87.

^{8 G Treitel, The Law of Contract (9th ed, 1994), 413 in P Morris & G Little, ‘Challenging}

Sports Bodies Determinations’ (1998) 17 Civil Justice Quarterly 128, 140.

^{9 J Black, ‘Constitutionalising Self-Regulation’ (1996) 59 Modern Law Review 24, 27. This}

describes the situation of “a group of persons or bodies, acting together, performing a regulatory function in respect of themselves and others who accept their authority”.

¹⁰ R Armstrong, ‘The Whistle has Blown ... Game Over ... Or is it Really? Challenging the

^{Decisions of Sports Governing Bodies in New Zealand’ (2008) 14 Canterbury Law Review}

65; J Caldwell, ‘Judicial Review of Sports Bodies in New Zealand,’ 44 in E Toomey (ed),

with a person’s right to work,¹² and specific legislation such as the New Zealand Bill of Rights Act 1990¹³ and the Commerce Act 1986¹⁴ may be applicable and even brought in conjunction with a restraint of trade claim in an appropriate situation. Due to the intricacy of the restraint of trade doctrine though, this article will not elaborate on these other bases of challenge.

Restraint of trade is an extremely flexible mechanism which is founded on the public policy that no person should be unreasonably restrained in the pursuit of his or her trade or profession.¹⁵ As seen from the factual contexts above, the common law doctrine is not limited to contractual restraints; it can be used to challenge a sports body’s rules, policies, practices and disciplinary tribunal rulings. More broadly it is applicable to all restraints, however imposed, and whether voluntary or involuntary.¹⁶

Another important feature of the doctrine is its accessibility. Although historically case law has suggested that there must be a contractual relationship between the parties, in that the court will only decline to enforce a contractual term,¹⁷ this no longer seems to be the position.¹⁸

Keeping the Score: Essays in Law and Sport (2002).

¹¹ Ibid.

^{12 See Nagle v Feilden [1966] 1 All ER 689; McInnes v Onslow-Fane [1978] 1 WLR 1520;}

Hughes v Western Australian Cricket Association (Inc) (1986) 69 ALR 660, 703-704.

^{13 For example see: Stratford Racing Club Inc v Adlam [2008] NZCA 92, [59] (per Chambers}

J).

^{14 Commerce Act 1986 s 7(1) provides that nothing in the Act limits or affects any rule of}

law relating to restraint of trade not inconsistent with the provisions of the Act. Similarly the Australian Trade Practices Act 1974 s 4M(a) provides that the common law restraint of trade doctrine is to continue in effect ‘insofar as that law is capable of operating concurrently’ with the Act.

¹⁵ B Ward, ‘Fair Play: Professional Sport and Restraint of Trade’ (1985) 59 Law Institute

^{Journal 545.}

¹⁶ Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353, 375.

^{17 See R v The Benchers of Lincoln's Inn [1825] EngR 814; (1825) 4 B & C 855; 107 ER 1277; Peter Watts}

argued that the Court in Nagle v Feilden perverted the doctrine of restraint of trade, “which at most involves the court in declining to give its aid to certain types of contractual provision, into suggesting that powerful parties can be forced to offer work to someone” (P Watts, ‘The Tort of Refusing to Contract’ (2008) 14 New Zealand Business Law Quarterly 69). On this basis it could be argued that the restraint of trade doctrine is a

^{‘negative doctrine’ only, in that it should not be used to force sports bodies to give}

sportspersons entry to the industry, nor impose positive obligations of reasonableness on sports bodies.

¹⁸ Nagle v Feilden [1966] 1 All ER 689; Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353; Smellie J in

This was clearly illustrated in Stininato v Auckland Boxing Association (Inc)¹⁹ where the claimant, a professional boxer, was refused access to the sport. Despite the absence of a contract with the governing body, the Court was willing to apply the doctrine.

It is also not necessary to be a party to a challenged agreement to lodge a restraint of trade claim. A third party can bring an action if they are unreasonably restrained by an agreement’s operation.²⁰ It is anticipated that third parties (notably sportspersons and coaches) will invoke the doctrine more frequently in the future where there is a fettering of commercial freedom. For instance, one situation may be where there is a conflict between a governing body’s or team’s sponsorship, media or marketing arrangements and the sportsperson’s personal arrangements.

The substantive remedies available to a successful litigant on establishing an unreasonable restraint of trade can be extremely effective.²¹ Characteristically in the context of sporting restraints, a declaration will be issued either pursuant to the court’s inherent jurisdiction or the Declaratory Judgments Act 1908 that the particular clause, rule, term or decision is an unreasonable restraint of trade, void, and thus unenforceable. Lord Wilberforce in Eastham v Newcastle United Football Club Ltd²² additionally noted that:

the court has jurisdiction to grant a declaratory judgment, not only against the employer who is in contractual relationship with the employee, but also against the association of employers whose rules or regulations place an unjustifiable restraint on his liberty of employment.²³

Rugby Union Players’ Association Inc v Commerce Commission(No 2) [1997] 3 NZLR 301, 315 approved the principles set out in Foschini v Victoria Football League (unreported, Supreme Court of Victoria, 9868/82, Crockett J, 15 April 1983) where the Court noted that the correctness of the proposition that the doctrine is not limited to a contractual relationship “may now be considered to be beyond doubt”; Stratford Racing Club Inc v Adlam [2008] NZCA 92.

^{19 [1978] 1 NZLR 1.}

²⁰ S Gardiner et al, Sports Law (3^rd ed, 2006), 216.

^{21 Damages are rarely claimed in a restraint of trade action. Only when a contract exists}

between the parties could damages be awarded: Nagle v Feilden [1966] 1 All ER 689.

^{22 [1963] 3 All ER 139.}

²³ Ibid 157.

However a declaration will not be issued as of right on an unreasonable restraint of trade being made out. The remedy is discretionary.²⁴

Although it will be rare, the most likely reasons for a court in declining to issue a declaration is if it would serve no useful purpose, there is a delay in bringing the claim, third parties would be prejudiced, or on the broad concept of the ‘overall justice’ of the situation.²⁵ Also in conjunction with a declaratory judgment, a mandatory injunction will often be sought to prevent the governing body from continuing to apply the restraint.²⁶ Furthermore, if the restraint of trade is premised in a contract, the New Zealand courts by virtue of the Illegal Contracts Act (ICA) 1970 have a wider jurisdiction than at common law²⁷ to modify the restraint provision. Section 8 ICA 1970 provides that the courts may delete an objectionable provision and enforce the amended contract, or modify the provision so that it is in a form which would have been reasonable at the time that the contract was entered into and then give affect to the modified contract. But where any deletion or modification would alter the bargain between the parties in a way that it would be unreasonable to allow the contract to stand, the court may decline to enforce the contract.²⁸

B. The Legal Framework Applied by the Courts in Determining an Unreasonable Restraint of Trade

The conventional²⁹ authoritative framework applied by the courts on analysing whether there is an unreasonable restraint dates from the 19^th

²⁴ Declaratory Judgments Act 1908s 10; see also, Blackler v New Zealand Rugby Football League (Inc) [1968] NZLR 547, 572 (per McCarthy J); Stininato v Auckland Boxing Association (Inc) [1978] 1 NZLR 1, 8 (per Richmond P) and 29 (per Cooke J); Stevenage Borough Football Club v Football League Ltd (1996) 9 Admin LR 109 where relief was refused.

²⁵ See: Eastham v Newcastle United Football Club Ltd [1963] 3 All ER 139, 159; Stevenage

^{Borough Football Club v Football League Ltd (1996) 9 Admin LR 109.}

²⁶ For example see Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353.

^{27 J Burrows, J Finn & S Todd, Law of Contract in New Zealand (3rd ed, 2007), 434;}

LexisNexis, The Laws of New Zealand: Contract, Part IX Illegal Contracts (2008), [233]-[237]. At common law, the courts could only sever objectionable parts in a contract where this could be done without destroying the contract.

^{28 J Burrows, J Finn & S Todd, Law of Contract in New Zealand (3rd ed, 2007), 434 – “the}

word “may” in subsection (1) is to be read meaning “shall” so that the Court must choose one of the three statutory options of - enforcement of the restraint, declining to enforce it, or modifying it and enforcing it as modified.”

^{29 Note that in Stevenage Borough Footall Club v Football League Ltd (1996) 9 Admin LR 109}

the Court held, in relation to a challenge on the sports body’s rules, that the plaintiff was

century House of Lords decision Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd.³⁰ Lord Macnaghten held that a restraining practice would be deemed void unless it was justified that:

the restraint is reasonable – reasonable, that is, in reference to the interests of the parties concerned and reasonable in reference to the interests of the public, so framed and so guarded as to afford adequate protection to the party in whose favour it is imposed, while at the same time it is in no way injurious to the public.³¹ [Emphasis added].

As the doctrine is premised on public policy, it is difficult to ascribe strict rules when analysing whether a situation should warrant a finding that the restraint is unreasonable. The court has significant discretion and will typically perform a balancing act based on a range of competing subjective values.

1. Is there a restraint of trade?

A necessary preliminary point to consider is whether the matter in question is actually a restraint of trade. If so, then prima facie the restraint will be void.³² The onus in establishing the restraint rests with the party affected – the player, club or other participant (also referred to in this article as the claimant).³³ It must be shown that the obligation prevents or limits their ability to earn a living through the sport.

(a) Is the claimant ‘in trade?’

It is irrelevant whether the sporting body in question is engaged in trade, it is only necessary for a sportsperson to be so engaged.³⁴ This will clearly occur if the sportsperson is deemed to be a professional, in

to establish that there was a restraint and that it did not operate reasonably in the

interests of the public. The first limb of Lord Macnaghten’s reasonableness test, (whether the restriction was in the interests of the parties) was omitted. This approach has not

been adopted in any other cases to date, but has not expressly been overruled.

^{30 [1894] UKLawRpAC 52; [1894] AC 535.}

³¹ Ibid 565.

^{32 Ibid; applied in Blackler v New Zealand Rugby Football League (Inc) [1968] NZLR 547, 555}

and 569.

^{33 Hughes v Western Australian Cricket Association (Inc) (1986) 69 ALR 660, 702.}

³⁴ Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353.

that they receive payment from participation in a sport.³⁵ However it is not essential that their entire or even a substantial part of their income derives from the sport. A sportsperson will be considered a professional if they are part-time.³⁶

In previous cases it has been argued that the doctrine ought not to apply to a claimant involved in amateur sport as they are not engaged

‘in trade’. This argument must be accepted, as was illustrated in the Australian case Skelton v Australian Rugby Union Ltd,³⁷ where an amateur sportsperson complains that they are prevented from competing as an amateur. However a fine distinction needs to be drawn where an amateur sportsperson is restricted from embarking on a professional career because of a restraint which limits his or her ability to follow their chosen occupation. North P (for the majority) in Blackler v New Zealand Rugby Football League (Inc) appropriately held that an amateur player was

‘in trade’ in circumstances where they were refused clearance to play professional rugby league in Australia.³⁸ His Honour stated that:

as a matter of principle, I can see no reason why the Court should be powerless to intervene in appropriate cases where a body administering an amateur sport takes to itself the power to prevent its players from seeking employment overseas as professional footballers without its consent.³⁹

It is submitted that this expansive approach adopted by North P is correct. The doctrine ought not to apply restrictively to professional sportspersons. This can be justified on the basis that there is often a

³⁵ M McDonagh, ‘Restrictive Provisions in Players Agreements’ (1991) 4 Australian Journal of Labour Law 126, 133. See also Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353.

^{36 Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353, 371-372; Hughes v Western Australian Cricket}

Association (Inc) (1986) 69 ALR 660; Barnard v Australian Soccer Federation (1988) 81 ALR 51;

^{Avellino v All Australia Netball Association Ltd [2004] SASC 56, [93].}

³⁷ [2002] QSC 193, [12]. The court will need to determine that the reality of the situation is that the player participates for pleasure, not money.

³⁸ [1968] NZLR 547. See also: the Australian case Hall v Victorian Football League [1982] VicRp 6; [1982] VR 64 where an amateur footballer was considered to be ‘in trade’ in circumstances where he wished to embark upon a professional career but was limited by the governing body’s rules from doing so; Barnard v Australian Soccer Federation (1988) 81 ALR 51; and the English case Gasser v Stinson (Unreported, High Court Chancery, No Ch-88-G-2191, Scott J, 15 June 1988).

³⁹ Blackler v New Zealand Rugby Football League (Inc) [1968] NZLR 547, 545.

blurring of distinction between amateur and professional sport⁴⁰ and/or a real potential for a budding sportsperson to earn a living from the sport.⁴¹ There are many ‘amateurs’ whose livelihoods would be affected if they were restricted from a sport or competition. For instance, it is possible that a restriction would impact on an amateur sportspersons reputation and therefore on his or her ability to continue to earn significant indirect financial reward through media contracts, sponsorship, or the like.⁴²

(b) Does the obligation ‘restrain’ the claimant in his or her trade?

The second aspect which the claimant may be required to establish is that the obligation acts as a restraint on their trade. It is not necessary for a restraint to be absolute; it can be partial.⁴³ A restraint of trade can take various forms, the most obvious being when access to a particular sport or competition is denied (whether temporarily or permanently).⁴⁴

^{Other common restraints include labour market controls (such as}

transfer systems, internal player-draft schemes, zoning and residential rules, salary caps)⁴⁵ and specific contractual terms contained in player agreements.⁴⁶

Often a restraint will be self evident with counsel agreeing from the outset that the particular obligation constitutes a restraint of trade.⁴⁷

Nevertheless on occasion the courts will be required to analyse the nature and extent of an obligation to determine if the claimant’s ability

⁴⁰ M McDonagh, ‘Restrictive Provisions in Players Agreements’ (1991) 4 Australian Journal of Labour Law 126, 133.

⁴¹ For example see:Hall v Victorian Football League [1982] VicRp 6; [1982] VR 64; Hughes v Western Australian

^{Cricket Association (Inc) (1986) 69 ALR 660, 700.}

⁴² Hughes v Western Australian Cricket Association (Inc) (1986) 69 ALR 660, 700. See also: Stininato v Auckland Boxing Association (Inc) [1978] 1 NZLR 1, 12 (per Woodhouse J); and Gasser v Stinson (Unreported, High Court Chancery, No Ch-88-G-2191, Scott J, 15 June

^1988).

⁴³ A Lewis & J Taylor, Sport: Law and Practice (2003). For example see:Stevenage Borough

^{Football Club v Football League Ltd (1996) 9 Admin LR 109; Greig v Insole [1978] 3 All ER}

449.

^{44 See Part C (1) of this article.}

⁴⁵ See below, n 83-87.

^{46 See below, n 88.}

⁴⁷ For example see: Kemp v New Zealand Rugby Football League Inc [1989] NZHC 53; [1989] 3 NZLR 463; Wickham v Canberra District Rugby League Football Club Ltd [1998] SCACT 9, [49]; Adamson v NSW Rugby League Ltd [1991] FCA 425; (1991) 103 ALR 319.

to seek and engage in employment has been fettered. The courts have indicated that when a governing body’s rules are under challenge, these have to be read in context with the nature of the game and with the body’s constitution. “They are not to be read like a contract wholly reduced to writing”.⁴⁸ This must be the correct approach as it enables the court to practically⁴⁹ consider whether there is a restraint. The restraint also need not operate on trade within the courts jurisdiction. The majority in Blackler held that “any restraint on employment whatsoever, whether it is intended to operate in New Zealand, or only overseas, or both, is prima facie void”.⁵⁰

2. Is the restraint justified – is it reasonable?

On the claimant making out that there is a valid restraint of trade, the onus will switch to the defendant (the sports governing body) to prove on the balance of probabilities that the restraint is reasonable and justified in the interests of the parties. If the defendant can establish this, the onus reverts back to the claimant who has the opportunity to prove that the restraint is not reasonable in the interests of the public. This is a question of law for the courts.⁵¹ If the restraint is contained in a contract the reasonableness of the restraint is to be assessed at the time the contract was entered into. Similarly, the validity of rules is tested at the date of imposition.⁵²

(a) Is the restraint reasonable having regard to the interests of the parties?

What is reasonable in the interests of the parties is the first limb of Lord Macnaghten’s reasonableness test. A restraint of trade will be void unless the governing body can show that firstly, the restraint is reasonably necessary to protect their interests (or objectives) and secondly, that the restraint does not impose on the claimant a greater degree of restraint than such reasonable

⁴⁸ Wickham v Canberra District Rugby League Football Club Ltd [1998] SCACT 9, [55].

^{49 See: Goutzioulos v Victorian Soccer Federation Inc [2004] VSC 173, [18]; Avellino v All}

Australia Netball Association Ltd [2004] SASC 56, [84]; Adamson v NSW Rugby League Ltd

^{[1991] FCA 425; (1991) 103 ALR 319, 345; Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353, 370.}

⁵⁰ Blackler v New Zealand Rugby Football League (Inc) [1968] NZLR 547, 554-555 (per North

^{P) and 569 (per McCarthy J).}

⁵¹ Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353, 377.

^{52 Adamson v NSW Rugby League Ltd [1991] FCA 425; (1991) 103 ALR 319, 359 (per Gummow J) and 346}

(per Wilcox J).

protection requires.⁵³ Typically this constitutes the substantive issues for the courts in determining whether any obligation is an unreasonable restraint of trade.

Inherent in the first issue is the necessity for the sports governing body to identify a legitimate interest requiring the court’s protection. A legitimate interest lies at the heart of the justification of restraint of trade for if there are no interests worth protecting then the restraint in question will be unreasonable.⁵⁴ This task of identifying a legitimate interest can be difficult as sports governing bodies’ constituent documents⁵⁵ and policy statements usually deal with welfare generalities not specific objectives in a “strict legal sense”.⁵⁶

Despite this, although it has sometimes been assumed,⁵⁷ the courts have recognised that sports bodies do have interests deserving of protection which would justify a reasonable restraint. This has included interests which: achieve a competitive balance between clubs to maximise spectator appeal (sporting equality),⁵⁸ ensure a club’s continued existence,⁵⁹ protect the economic viability of a game or competition and protect its proper organisation and administration,⁶⁰

⁵³ See: Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] UKLawRpAC 52; [1894] AC 535, 565; Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353, 377-378. Note that in Stevenage Borough Football Club v Football League Ltd (1996) 9 Admin LR 109 Carnwath J claimed that the standard of unreasonableness should be the public law Wednesbury standard due to the nature of a sports body. This was a marked departure from Nordenfelt.

⁵⁴ J Carter & D Harland, Contract Law in Australia, (4^th ed, 2002), 588 in C Davies, ‘The Use of Salary Caps in Professional Team Sports and the Restraint of Trade Doctrine’ (2006) 22 Journal of Contract Law 246, 247.

^{55 Most sports governing bodies in New Zealand are incorporated under the}

Incorporated Societies Act 1908.Section 6(1)(b) requires the rules of the society to state the objects for which the society is established.

⁵⁶ B Ward, ‘Fair Play: Professional Sport and Restraint of Trade’ (1985) 59 Law Institute

^{Journal 545, 546.See also dicta per Slade J in Greig v Insole [1978] 3 All ER 449, 496.}

⁵⁷ See Blackler v New Zealand Rugby Football League (Inc) [1968] NZLR 547, 556 (per North

^P).

⁵⁸ This is usually the justification offered when restrictions limit the ability of players to move and in respect of rules which require transfer fees, drafts, and salary caps. For example see: Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353, 377; Foschini v Victoria Football League (Unreported, Supreme Court of Victoria, 9868/82, Crockett J, 15 April 1983); Adamson v NSW Rugby League Ltd [1991] FCA 425; (1991) 103 ALR 319.

^{59 Beetson v Humphries (Unreported, Supreme Court of NSW, No 10950, Hunt J, 30 May}

1980); Adamson v NSW Rugby League Ltd [1991] FCA 425; (1991) 103 ALR 319.

^{60 Greig v Insole [1978] 3 All ER 449; Hoszowski v Brown (Unreported, Supreme Court of}

NSW, No 1667/78, Helsham CJ, 6 October 1968); Eastham v Newcastle United Football Club

aim to encourage new entrants,⁶¹ maintain the strength of the game,⁶² and ensure a workable and deterrent system to improve the quality of players from which the national team can be selected.⁶³

Assuming a legitimate interest has been identified, the restraint imposed by the governing body must be reasonably related, in that it advances or protects that interest. It must not be inconsistent with it. This will depend entirely on the evidence adduced in each case. For example, in the recent Australian case Avellino v All Australia Netball Association Ltd⁶⁴ the Supreme Court of South Australia held that a residency rule for players was inconsistent with one of the legitimate objectives of the National Netball League to “produce an ongoing, strong, dynamic “national” competition”. The rule did not advance Avellino’s position. To the contrary it would “appear to restrict players worthy of selection... from being selected” in a national competition.⁶⁵

The second issue, namely whether the restraint has gone beyond that which is considered reasonably necessary to protect the governing bodies legitimate interest, has received far more attention. Ultimately, this issue must be adjudged in light of the circumstances of the particular case. As Part C of this article will consider the reasonableness of specific types of restraints, it is desirable at this point to simply outline some general principles which the courts may apply.

An initial factor which may be relevant is the bargaining power of the parties. Specifically, the courts have indicated that a restraint of trade contained in a governing body’s constitution or rules will be treated differently from a negotiated contractual restraint.⁶⁶ The distinguishing feature is that restraints in a sports body’s rules are involuntarily imposed; there is no realistic opportunity for the claimant to negotiate. In contrast, there may be an opportunity to negotiate contractual restraints. Thus if a contractual agreement is reached through fair

Ltd [1963] 3 All ER 139.

^{61 Adamson v NSW Rugby League Ltd [1991] FCA 9; (1991) 100 ALR 479.}

⁶² Kemp v New Zealand Rugby Football League Inc [1989] NZHC 53; [1989] 3 NZLR 463, 468-469.

^{63 Gasser v Stinson (Unreported, High Court Chancery, No Ch-88-G-2191, Scott J, 15 June}

1988); Johnson v Athletics Canada (1997) 41 OTC 95.

^{64 [2004] SASC 56.}

⁶⁵ Ibid [107].

^{66 Kemp v New Zealand Rugby Football League Inc [1989] NZHC 53; [1989] 3 NZLR 463. See also Goutzioulos v}

Victorian Soccer Federation Inc [2004] VSC 173.

bargaining, the courts justifiably are more likely to hold the restraint as reasonable between the parties.⁶⁷

In determining whether the restraint goes beyond that which is reasonable it is necessary to analyse how wide or onerous the restriction is (for example, the duration of the restraint may be an important consideration). In doing this it is the restraint that must be looked at, not the way in which the restraint is applied or intended to apply.⁶⁸ Two questions may be of significant influence here: is there any evidence that the legitimate interests or objective of the governing body might be jeopardised if the restraint was not so drastic,⁶⁹ and could the legitimate interests be met through a less restrictive alternative means?⁷⁰

Although Wilcox J in Adamson v NSW Rugby League Ltd⁷¹held that the primary question will always be the extent of a governing body’s need for protection, it is inevitable that the court will also consider the effect (or potential effect) of the restraint upon the claimant. The harm caused to the affected party must not be out of proportion to the benefit secured by the sports governing body.⁷² While the case law has unequivocally established that economic effects are relevant considerations, it is not yet clear whether non-economic considerations (such as the effects on one’s personal life) will be relevant.⁷³ A

⁶⁷ For support of this proposition see dicta per Gummow J in Adamson v NSW Rugby League Ltd [1991] FCA 425; (1991) 103 ALR 319, 363. His Honour also asserts that if the restraint is involuntarily imposed, that there should be a heavier burden on the governing body to prove that the obligation should be enforceable. See also: Hawthorn Football Club v Harding [1988] VicRp 5; [1988] VR 39; Bulldogs Rugby League Club Ltd v Williams [2008] NSWSC 822, [46]-[47]; and A Humphreys, ‘Sport, Restraint of Trade and the Australian Courts: Adamson v New South Wales Rugby League Ltd’ [1993] SydLawRw 5; (1993) 15 Sydney Law Review 92, 97.

^{68 Kemp v New Zealand Rugby Football League Inc [1989] NZHC 53; [1989] 3 NZLR 463. See also Adamson v}

NSW Rugby League Ltd [1991] FCA 425; (1991) 103 ALR 319, 360.

^{69 Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353; Adamson v NSW Rugby League Ltd (1991) 103 ALR}

319.

^{70 Adamson v NSW Rugby League Ltd [1991] FCA 425; (1991) 103 ALR 319, 349-350.}

⁷¹ Ibid 341 (per Wilcox J) and 323 (per Sheppard J). Sheppard J agreed that the Court must have regard to the effects of the restriction on the sportsperson in question but considered that there may be cases in which the restraint is so “obviously unreasonable” (or drastic) that no examination of its effect is required in order to reach a conclusion.

⁷² A Lewis & J Taylor, Sport: Law and Practice (2003), 175.

^{73 Wilcox J in Adamson v NSW Rugby League Ltd [1991] FCA 425; (1991) 103 ALR 319, 341 held that “non-}

economic effects ought not to be disregarded. They may not be as easy to evaluate as economic effects but they may be just as significant, especially in the case of a restraint on a person’s ability to choose an employer.” In contrast Sheppard J (at 323) was

Humphreys convincingly argues that the whole argument of economic and non-economic effects, not only being a difficult distinction to maintain, seems to overlook the foundations of the restraint of trade doctrine.⁷⁴ The doctrine is essentially aimed at interferences with an individual’s liberty of action. It is not based on any economic theory. Therefore it is completely justifiable, in this sense, for the doctrine to be concerned with wholly non-economic interests.

The courts, in deciding if a restraint of trade is unreasonable in the circumstances, have commonly favoured an approach of balancing the legitimate interests of the governing body on the one hand against the interests of the sportsperson on the other. Wilcox J succinctly stated that:

[t]he very notion of reasonableness involves a balancing of competing considerations. The more onerous the restraint, the more difficult it is for the person seeking to enforce the restraint to satisfy a court that it was, in all of the circumstances, no more than was reasonably necessary for the protection of his or her interests.⁷⁵ [Emphasis added]

So if, for example, the restraint imposed was onerous, it would be difficult for the governing body to establish that the restraint was reasonable. The effect of the restraint on the claimant would have to be very minimal for the court to be able to conclude that the restraint was reasonable. However this approach was criticised by Gummow J in Adamson. His Honour asserted that while it was necessary to consider the position of the claimant the court is “not to undertake a balancing exercise with a comparative evaluation of the weight of the interests of organisers and players”.⁷⁶ To do this, his Honour stated, would be to impermissibly lighten the burden of proof carried by the governing body.⁷⁷ Miles CJ in Wickham v Canberra District Rugby League Football Club

undecided whether it was appropriate to take into account non-economic considerations.

⁷⁴ A Humphreys, ‘Sport, Restraint of Trade and the Australian Courts: Adamson v New

^{South Wales Rugby League Ltd’ [1993] SydLawRw 5; (1993) 15 Sydney Law Review 92, 97-98.}

⁷⁵ Adamson v NSW Rugby League Ltd [1991] FCA 425; (1991) 103 ALR 319, 341. See also Kemp v New Zealand Rugby Football League Inc [1989] NZHC 53; [1989] 3 NZLR 463, 469-470 where the Court approved of the balancing approach.

^{76 Adamson v NSW Rugby League Ltd [1991] FCA 425; (1991) 103 ALR 319, 364.}

⁷⁷ Ibid 365.

Ltd⁷⁸ seemed to favour this approach. While there is no recent authority in New Zealand as yet, it is in the interests of the claimant to argue that Gummow J’s approach ought to be adopted.

(b) Is the restraint reasonable having regard to the interests of the public?

Secondly if the governing body can establish that the restraint is reasonable and justified in the interests of the parties, the claimant has one final opportunity to assert that the restraint is unreasonable in that it is inconsistent with or reasonably injurious to the public. This second limb of Lord Macnaghten’s reasonableness test is not often considered by the courts as the governing body, in the majority of cases, is unable to make out the first limb.⁷⁹ Furthermore, A Buti correctly recognises that another reason why public interest factors have received less attention is because they are intimately connected with the determination of what is reasonable between the parties.⁸⁰

Nevertheless the courts have on limited occasion cast their attention to various public interest or policy considerations when assessing restraints. The High Court of Australia in Buckley v Tutty observed that “it is contrary to the public welfare ... that the public should unreasonably be deprived of the services of a man prepared to engage in employment”.⁸¹Therefore it is not in the public’s interest to be denied access to the pleasure of watching players of the highest skill play at representative level.⁸² Even still, it will be very rare for a restraint that is reasonable between the parties to be invalidated specifically for the reason that it is injurious to the public.

⁷⁸ [1998] SCACT 9, [49].

^{79 For example see: Blackler v New Zealand Rugby Football League (Inc) [1968] NZLR 547,}

572 (per McCarthy J); Kemp v New Zealand Rugby Football League Inc [1989] NZHC 53; [1989] 3 NZLR 463;

^{Avellino v All Australia Netball Association Ltd [2004] SASC 56, [115].}

⁸⁰ A Buti, ‘Salary Caps in Professional Team Sports: An Unreasonable Restraint of Trade’ (1999) 14 Journal of Contract Law 130, 152.

⁸¹ [1971] HCA 71; (1971) 125 CLR 353, 380.

^{82 See: Daley v New South Wales Rugby League Ltd (1995) 78 IR 247; Greig v Insole [1978] 3}

All ER 449, 503; Hughes v Western Australian Cricket Association (Inc) (1986) 69 ALR 660,

^{703, where Toohey J held that it is in the public’s interest “in having every opportunity to}

see first class cricketers in action”.

C. Application of the Restraint of Trade Doctrine: Denial of Access to a Sport or Competition

Now that the legal framework of the restraint of trade doctrine has been established, this article will turn to specific circumstances in which a claimant may be able to call upon the doctrine to hold a sports governing body to account. In doing this reference will be made to several contemporary situations in which a claim, if brought before the courts, could possibly succeed.

There are broadly three established categories of restraint of trade cases. Firstly, where a claimant is denied access to a sport or competition. Secondly, challenging a governing body’s labour market controls (such as transfer rules within a league,⁸³ transfer rules outside of a league,⁸⁴ internal draft schemes,⁸⁵ zoning and residential rules,⁸⁶ and salary caps).⁸⁷ And thirdly, specific contractual terms contained in player agreements which act as a restraint.⁸⁸ Due to recent interest in the former category and extensive analysis of the latter categories,

⁸³ For example see: Eastham v Newcastle United Football Club Ltd [1963] 3 All ER 139; Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353; Foschini v Victorian Football League (Unreported, Supreme Court of Victoria, BC8300014, 15 April 1983).

⁸⁴ For example see: Blackler v New Zealand Rugby Football League (Inc) [1968] NZLR 547;

^{Kemp v New Zealand Rugby Football League Inc [1989] NZHC 53; [1989] 3 NZLR 463.}

⁸⁵ For example see: Adamson v NSW Rugby League Ltd [1991] FCA 425; (1991) 103 ALR 319; W Pengilley,

^{‘Sporting Drafts and Restraint of Trade’ (1994) 10 Queensland University of Technology Law}

Journal 89; W Pengilley, ‘Restraint of Trade and Antitrust: A Pigskin Review Post Super

^{League’ (1997) 6 Canterbury Law Review 610.}

⁸⁶ For example see: Hall v Victorian Football League [1982] VicRp 6; [1982] VR 64; Avellino v All Australia Netball Association Ltd [2004] SASC 56; Nobes v Australian Cricket Board (Unreported, Supreme Court of Victoria, BC9102902, Marks J, 16 December 1991).

^{87 See J Taylor & M Newton, ‘Salary Caps - the Legal Analysis’ (2003) 11 Sport and the Law}

Journal 158. For differing opinions as to whether salary caps are an unreasonable restraint of trade see A Buti, ‘Salary Caps in Professional Team Sports: An Unreasonable Restraint of Trade’ (1999) 14 Journal of Contract Law 130 (who argues that salary caps are unreasonable) and C Davies, ‘The Use of Salary Caps in Professional Team Sports and

the Restraint of Trade Doctrine’ (2006) 22 Journal of Contract Law 246(who argues that salary caps are not unreasonable).

⁸⁸ See M McDonagh, ‘Restrictive Provisions in Players Agreements’ (1991) 4 Australian Journal of Labour Law 126. For example ‘playing’, ‘media/marketing’, or ‘conduct’ provisions may be an unreasonable restraint of trade. In Beetson v Humphries (Unreported, Supreme Court of NSW, No 10950, David Hunt J, 30 May 1980) an unreasonable restraint took the form of a prohibition on the content of journalistic articles published by rugby players. This was ‘completely unnecessary for the protection of the Leagues interests’.

attention will solely be directed at the former. It is important to emphasise that these categories are by no means exhaustive. As the doctrine has progressively developed on public policy values, there is nothing to prevent a claimant applying the legal framework, as outlined above, to obligations which impose novel restraints on their trade.

A claimant can be disciplined and denied access to a sport or competition by virtue of a governing body’s rules or more commonly the decision of a disciplinary committee or the governing body itself. Exclusion in the form of a ban or suspension constitutes a ‘restraint’. Therefore, assuming the claimant is ‘in trade’, the issue for the courts is to determine the reasonableness of the restraint.

As mentioned briefly in the introduction, perhaps the most high profile current situation which may constitute an unreasonable restraint of trade is the stance adopted by various national cricket bodies (such as the England and Wales Cricket Board (ECB) and New Zealand Cricket (NZC)) who threatened to exclude those players that participated in the rebel Twenty20 ICL from playing all ICC sanctioned cricket matches under their authority. While this will be of little concern to many of the rebel league players who are in the twilight of their cricketing careers,⁸⁹ for others, especially New Zealand cricketers Hamish Marshall and Shane Bond,⁹⁰ this stance constitutes a severe restriction on their ability to earn a living from playing cricket full time. If this stance was maintained, firstly, Marshall and Bond would be unable to honour and benefit financially from United Kingdom county cricket contracts,⁹¹ secondly, they would not be permitted to hold contracts to play for

⁸⁹ Namely New Zealand cricketers: Chris Cairns, Adam Parore, Nathan Astle, Chris

^{Harris and Craig McMillan.}

⁹⁰ Also Daryl Tuffey, Andre Adams and Lou Vincent may be adversely affected.

^{91 Marshall signed a four year county cricket contract with Gloucestershire in 2007. Bond}

also signed for Hampshire for six weeks at the start of the season. Centrally contracted players require a ‘no-objection certificate’ from their national cricket board to compete overseas; non-contracted players do not need this. However the ECB (governing body of English Cricket which includes county cricket) under a clause in their rules, initially refused to register these players (and others, despite a no-objection certificate being obtained), preventing them from competing in the Country Cricket Competition, because of their involvement with the ICL. See: G Longley, ‘Bond Defies ECB Ruling for

^{County’ (2008) The Press Sport, <http://www.stuff.co.nz/thepress/4472558a6429.html>}

at 10 April 2008.

their domestic State Championship teams in New Zealand, and thirdly, they would not be selected to play for the Blackcaps.⁹²

This situation has significant parallels with Kerry Packer’s 1977-1978

‘unsanctioned’ World Series Cricket (WSC) competition.⁹³ In similar fashion, the ICC declared that all WSC players would be banned from playing test cricket unless they rescinded their WSC contracts by a certain date. The ICC also recommended that national governing bodies take similar action in respect of their domestic game. This consequently prompted a resolution from the English Test and County Cricket Board (TCCB) that it would alter its rules to disqualify any player from county cricket that was subject to the ICC’s test match ban. Three contracted WSC players Tony Greig, Michael Proctor, and John Snow sought to challenge the ICC and TCCB that these rules constituted an unreasonable restraint of trade.

Slade J, in the ensuing case Greig v Insole,⁹⁴ held that the rules were unreasonable, ultra vires, and therefore void. His Honour claimed that although the ICC and TCCB did have legitimate interests to protect,⁹⁵ neither the ICC or TCCB discharged the onus of showing that the retrospective ban on contracted WSC players was reasonable and justified. Slade J in analysing the extent of the ICC’s need for protection arrived at the conclusion that while the WSC presented an immediate threat to the finances of Australian cricket, there was no serious threat to the other test playing nations.⁹⁶ Indeed the WSC competition could possibly even raise the profile and bring increased interest and financial benefit to the sport as a whole.⁹⁷ In the long term

⁹² The Blackcaps are New Zealand’s national cricket team; R Boock, ‘NZ Cricket Bans

^{Six Rebels’(2007) Sunday Star Times, <http://www.stuff.co.nz/4340511a10133.html> at}

30 December 2007.

^{93 For a comprehensive overview of the WSC situation see: G Haigh, Cricket War: The}

Inside Story of Packer’s World Series Cricket (1993).

^{94 [1978] 3 All ER 449.}

⁹⁵ Ibid 497. Namely, that it was in the public interest that cricket should be properly organised and administered.

⁹⁶ Ibid 501. It was argued that WSC was a grave threat to the economic viability of the game. WSC would diminish the income derived from test cricket and threaten the game as a whole by reducing the profits which would be passed either directly or indirectly to

^{the lower levels of the game. The ICC therefore argued it was acting reasonably in aiming}

to prevent players from taking part in the WSC competition which could threaten the

^{ICC’s legitimate interest.}

⁹⁷ Ibid.

however, the WSC could present a threat to test playing countries. But this, his Honour held, could have been adequately met by imposing a prospective disqualification on players who thereafter contracted with or played WSC.⁹⁸ While a prospective ban would not necessarily be valid, Slade J stated, it could be more easily justified than a retrospective ban which in this case was both a ‘serious and unjust step to take.’⁹⁹ The Court therefore held that the benefits derived from the ban were highly speculative and did not outweigh the injustice of depriving WSC players of an important means of making their living. Furthermore the public would be deprived of a great deal of pleasure if they did not have the opportunity of watching the WSC players in official test matches.¹⁰⁰ Slade J then went onto hold that the TCCB’s resolution to ban WSC players from county cricket was even more serious and therefore it was also an unreasonable restraint.¹⁰¹

Likewise, in the subsequent case Hughes v Western Australian Cricket Association (WACA) (Inc)¹⁰² the WACA sought to automatically ban cricketers from playing in Australia who had participated, or intended to participate in unauthorised cricket matches in South Africa without their written authority. Toohey J held that this rule went beyond a restraint reasonably related to the object of control and regulation of cricket in Western Australia for the following reasons: the disqualification was for an indefinite time, the rule imposed automatic disqualification, there was no right to appeal the ban, the rule precluded playing cricket overseas, and the rule applied retrospectively.¹⁰³ The totality of these considerations lead to Toohey J’s finding which was reinforced by the fact that the restraint was contrary to the public’s interest.

With the ICL situation being virtually analogous to the circumstances of Greig and also drawing on the authority in Hughes, it is submitted that

⁹⁸ Ibid.

⁹⁹ Ibid 501 and 503.

^{100 Ibid 503.}

¹⁰¹ Ibid 503-504. While test cricket presents a valuable opportunity for cricketers to supplement their income from time to time by playing in test matches, county cricket offers an opportunity to earn a living by playing full time cricket throughout the English summer. The denial of the opportunity to play in English county cricket is therefore a much more serious deprivation to players.

^{102 (1986) 69 ALR 660.}

¹⁰³ Ibid 703.

if national cricket bodies continue to maintain their stance in banning rebel league players from participating in ICC sanctioned events this is likely, if challenged before a court, to constitute an unreasonable restraint of trade. Even if a national cricket body imposed a prospective ban this should still be deemed unreasonable. Applying the commonly adopted balancing approach, the effect on the players of such an onerous obligation (it is difficult to think of a more onerous obligation) would outweigh any possible legitimate interest of the ban. On a ‘fair and objective basis’¹⁰⁴ these players do not deserve such a sanction. It is no answer for the governing body to say that they ‘might have expected it.’¹⁰⁵ Additionally the public would be denied access to watch some of the most talented players participate at the highest level in one-day and test matches. This would quite likely injure the sport.

Merely by NZC (or another national cricket body) overlooking a player for national selection (or as NZC officially stated ‘that the selectors will be encouraged to consider other players’ who have not played in the ICL) rather than impose an outright ban, does not avoid the issue.¹⁰⁶

What is important is the practical effect of the restraint on the players.¹⁰⁷ However as most of the New Zealand rebel league players have no desire or ambition to play for the Blackcaps again, perhaps of greater concern for them was the stance initially adopted by the ECB in denying them access from playing county cricket. Fortunately for Bond and Marshall they did not have to resort to challenging the legality of the ECB’s initial position as the ECB eventually softened their stance and granted these players clearance.¹⁰⁸ This was a sensible move from the ECB.

Other situations associated with the ICL which may provoke cricketers to bring a restraint of trade claim in the future include: if a national cricket body refuses to release centrally contracted players¹⁰⁹ to

¹⁰⁴ Greig v Insole [1978] 3 All ER 449, 503-504.

¹⁰⁵ Ibid.

^{106 D Hopps, ‘Bond’s Choice of Indian League Opens a Legal Can of Worms’(2008) The}

Guardian Sport <http://sport.guardian.co.uk/cricket/story/ 0,,2233977,00.html> at 2

^{January 2008.}

¹⁰⁷ See above, Part B (1)(b) of this article at n 49.

^{108 The Press, ‘English Officials Clear Bond, Marshall to Play’ The Press (Christchurch) at 12}

April 2008.

^{109 A clause in national cricket contracts usually states that the national cricket body is to}

approve of any matches which the player plays in: The Press, ‘Bond Spat has Parallels’

compete in the ICL when they are not required for their country¹¹⁰ (or even the rival ICC sanctioned Twenty20 Indian Premier League (IPL) competition¹¹¹); or if a national cricket body determines that it will not select a centrally contracted cricketer for the national team because of the fact that the cricketer has signed to play in the ICL at the conclusion of their contract.¹¹² While the first potential situation may not be as likely to constitute an unreasonable restraint of trade if the cricketer had the opportunity to negotiate their national contract and it was reached through fair bargaining, the latter situation, applying Greig, could well be considered unreasonable.

A claimant who is denied access to a sport or competition may also be able to successfully apply the doctrine in several other established factual scenarios. The courts have held a restraint to be unreasonable where: a sports governing body’s rules were amended to impose a ban on sportspersons who played another sport,¹¹³ a licence application was refused which was necessary to compete in a particular sport,¹¹⁴ a governing body’s rules excluded certain players from consideration for selection in all representative matches,¹¹⁵ and where a winning sports

The Press (Christchurch) at 19 January 2008.

^{110 R Boock, ‘Rebel, Rebel’ Sunday Star Times (NZ National) at 2 March 2008. Note that}

Lou Vincent breached his NZC Contract when he signed and left to play for the ICL

^{without even seeking the permission of NZC.}

¹¹¹ See O Brett, ‘England IPL Ban ‘Will not Work’’ (2008) BBC Sport,

^{<http://news.bbc.co.uk/sport2/hi/cricket/england/7338282.stm> at 9 April 2008. The}

ECB’s present stance is to not allow centrally contracted English cricket players to play in the sanctioned IPL. If the ECB does not soften their stance it is possible that a claim could be brought. Although this is possible, it is very unlikely that the players will challenge the ECB, as they would be jeopardising their chances of being selected for England.

^{112 The Press, ‘Bond Spat has Parallels’, The Press (Christchurch) at 19 January 2008. Shane}

Bond signed to play in the ICL in January 2008 at a time when he held a NZC contract. This contract was due to expire in May 2008. NZC did not wish to select him for the Blackcaps because of his future ICL involvement. In the end, Bond and NZC came to an arrangement that he would be released early from his contract and would not be selected for the Blackcaps.

^{113 Barnard v Australian Soccer Federation (1988) 81 ALR 51. Here FIFA wished to not only}

control outdoor soccer but also indoor soccer. FIFA thereby amended its rules so that any person who played indoor soccer (for the rival governing body FIFUSA or an affiliate of FIFUSA) was banned from playing outdoor soccer.

^{114 For example see:Nagle v Feilden [1966] 1 All ER 689; Stininato v Auckland Boxing}

Association (Inc) [1978] 1 NZLR 1. Note the possibility of raising an alternative action claiming that there is ‘a right to work’.

¹¹⁵ Daley v New South Wales Rugby League Ltd (1995) 78 IR 247.

club was denied promotion in a League on the basis that it did not meet the other admission criteria by a prescribed date.¹¹⁶

On the other hand, there have been certain situations where despite a participant being denied access to a sport or competition there has been a degree of reluctance from the courts in finding the restraint to be unreasonable. One situation is where a player is suspended for foul play.¹¹⁷ The important distinction here is that the player is precluded by reason of his or her own past misconduct rather than by general regulation. The object of a suspension is to deter violence or other misbehaviour by players and to protect the reputation of the sport. The restriction on the claimant’s freedom is merely incidental.¹¹⁸ Therefore the courts have indicated that they will apply a similar standard as to the reasonableness of a suspension as is commonly found in a judicial review action. That is, that the suspension, at the least, must be unreasonable of a kind that no reasonable tribunal could have made such a decision.¹¹⁹

Another situation where the courts have shown reluctance is in relation to athletes that are suspended from a sport by virtue of committing a doping offence. In Gasser v Stinson¹²⁰ the English High Court held that although strict liability drug rules which imposed automatic blanket suspensions on athletes found to have prohibited substances in their body was a restraint of trade, this rule was proportionate and reasonable not only in the interests of the parties but also the public.¹²¹

There is a need to eliminate and deter drug taking in sport. To permit an athlete to endeavour to establish their ‘moral innocence’ in such a

¹¹⁶ Stevenage Borough Football Club v Football League Ltd (1996) 9 Admin LR 109. Although Stevenage Borough finished top of the GM Vauxhall Conference they were denied promotion in the League on the grounds that it did not satisfy certain requirements relating to ground capacity and safety by December of the winning season. It would however, have been able to satisfy these requirements by the start of the new season. Carnwath J, stated (obiterdicta), that this entry criterion was an unreasonable restraint of trade. A discretionary remedy was not granted though.

^{117 Skelton v Australian Rugby Union Ltd [2002] QSC 193.}

¹¹⁸ Ibid [13].

^{119 See above, n 53; See also Jackson v Western Australia Basketball Federation Inc (1990) 21}

ADL 283, 288 applying Shepherd v South Australian Amateur Football League Inc (1987) 44

^{SASR 579, 586 (per Cox J).}

¹²⁰ (Unreported, High Court Chancery, No Ch-88-G-2191, Scott J, 15 June 1988); see also Wilander v Tobin [1997] 1 Lloyd’s Rep 195.

¹²¹ A Lewis & J Taylor, Sport: Law and Practice (2003).

situation would be difficult to prove and lead to an opening of the floodgates.¹²²

However in contrast, there is greater potential for a claimant to attack the length of a doping suspension for being unreasonable.¹²³ This is especially so in relation to a four-year or life ban from a sport, but even a two-year suspension may be an unreasonable restraint of trade in some circumstances.¹²⁴ This fear of challenge prompted the International Association of Athletics Federation (IAAF) in 1997 to halve the mandatory length of suspension to two years.¹²⁵ The new World Anti-Doping Code (WADC), effective as from 1 January 2009, may come under challenge in this respect as sanctions have been toughened to impose four-year bans for a greater number of offences.

As outlined in the introduction, a sports governing body’s rule (such as BOA byelaw 25) which imposes a lifetime ban on sportspersons found guilty of a doping offence from competing in a particular competition (such as the Olympics), could well, and it is submitted should, constitute an unreasonable restraint of trade. The Olympics is the pinnacle event for any athlete. To be banned for life from competing in

¹²² Gasser v Stinson (Unreported, High Court Chancery, No Ch-88-G-2191, Scott J, 15

^{June 1988). For more detailed commentary see: A Greenhow, ‘Anti-Doping Suspensions}

and Restraint of Trade in Sport’ (2008) Sports Law eJournal,

^{<http://epublications.bond.edu.au/slej/7> A Mathieson, ‘The World Anti-Doping}

Agency and the World Anti-Doping Code: Can the Right of an Athlete to Compete Freely and the Right of Sport to Regulate Competition be Reconciled?’ (2006) 65 The Commentator 3; and T Buti & S Fridman, ‘Drug Testing in Sport: Legal Challenges and Issues’ [1999] UQLawJl 1; (1998-1999) 20 University of Queensland Law Journal 153. Note that the new WADC (2009) provides greater flexibility to reduce sanctions from zero to two years for specified substances (lesser offences) where an athlete can establish there is no intention to

enhance performance. This undermines the previous strict liability position: Yahoo,

^{‘Athletics Stays Tough in the Face of Softer Sanctions’(2007) Yahoo UK and Ireland Sport,}

<http://uk.eurosport.yahoo.com/16112007/3/athletics-stays-tough-face-softer- sanctions.html> at 16 November 2007.

¹²³ See T Buti & S Fridman, ‘Drug Testing in Sport: Legal Challenges and Issues’ (1998-

^{[1999] UQLawJl 1; 1999) 20 University of Queensland Law Journal 153.}

¹²⁴ See Robertson v Australian Professional Cycling Council Inc (Unreported, Supreme Court of NSW, Waddell CJ, 10 September 1993). Also in May 1997 Katrin Krabbe was awarded damages by the German Athletics Federation after a German Court determined that a three year suspension was an unreasonable restraint of trade.

¹²⁵ Yahoo, ‘Athletics Stays Tough in the Face of Softer Sanctions’(2007) Yahoo UK and Ireland Sport, <http://uk.eurosport.yahoo.com/16112007/3/athletics-stays-tough-face- softer-sanctions.html> at 16 November 2007.

such an event for an offence already served seems excessive and unjust. It places on the claimant a greater degree of restraint than such reasonable protection requires. It is extremely difficult to view that the BOA’s legitimate interests in this rule (presumably to deter drug taking and to protect the country’s reputation) would outweigh the economic and non-economic effects on an affected sportsperson. Further, it is quite possible that the legitimate interests of the BOA could be met through a less restrictive route, such as by providing a rule that drug offenders must not compete in the Olympics for a ‘four-year Olympic cycle.’¹²⁶ A convincing argument could also be submitted that a ban of this nature would deny the public access to the pleasure of ever watching the banned athlete compete at the Olympics.

Conclusion

It is no exaggeration that restraint of trade, as a mechanism for challenge, is an extremely “powerful weapon”.¹²⁷ As illustrated, the doctrine is highly accessible, flexible, and can apply to a broad spectrum of circumstances which unreasonably limit a player’s, club’s, or other participant’s ability to earn a living. In this professional age of sport in which governing bodies are increasingly exercising greater control over the actions of participants, it is important for interested parties to be aware of the limits to this and the legal principles that will be applied upon bringing a challenge. A ‘red’ or ‘yellow’ card shown by a governing body to limit the actions of a participant need not always be accepted, and if challenged before a court of law, may well be deemed unenforceable.

¹²⁶ This is the approach of the New Zealand Olympic Committee (NZOC). For example see The Herald, ‘Cycling: Drugs Ban Comes Back to Haunt Yates’ (2008) The Herald

^{News, <http://www.nzherald.co.nz/topic/story.cfm ?c_id=500833 & objectid=10504615>}

at 17 April 2007.

^{127 P Morris & G Little, “Challenging Sports Bodies” Determinations’ (1998) 17 Civil}

Justice Quarterly 128, 140.