The winners and losers from Federal Court directions hearing: Essendon supplements saga
I posted my predictions about the big ticket items in the litigation between Essendon, James Hird and ASADA and how they would be dealt with. How did these predictions fare? Who won the skirmishes?
Before reviewing the scorecard, a shout out to ABC News 24 that the next time it decides to broadcast live from the Federal Court of Australia, it might choose NOT to cut away at crucial points in the hearing to the bemused presenter, who moves onto new stories. When we watch Big Brother we want to know who gets voted off. For that reason, live streaming on the Internet was definitely the way to go. Otherwise, the fate of Essendon’s application for an injunction, and whether or not the players should be part of the case, would rest on reports from those who were inside court.
That said, whilst the hearing was riveting for legal enthusiasts, some of the terminology was opaque. After the term “joinder” was mentioned in quick succession (in relation to whether the players should be “joined” to the case), the prospect ABC News 24 would cut away shortened to $1.10 odds. And sure enough, it did.
Fortunately for viewers, much had been agreed between the parties before court commenced, including the 11 August 2014 trial date.
We turn now to the fate of my predictions, and how the parties fared.
I had predicted this question would not be resolved at the hearing. It was.
The evening before the hearing, ASADA decided to grant the affected players a further time extension to respond to the show cause notices. However, the new process would involve no fixed date (which had previously been 11 July 2014). Instead, after 30 June 2014 if a notice was issued to the players at a point in time, they would have 14 days to respond (previously 10 days).
Essendon, by its senior counsel Neil Young QC (who clarified at the hearing that only Essendon sought the injunction, not James Hird), took issue with this approach. His submission was that ASADA’s method created uncertainty, and could lead to the prospect of the parties’ returning to court for a further injunction hearing if and when it re-activated the show cause process. He noted the cost and inconvenience of such a prospect.
On the first limb of the test for an injunction, whether there is a serious question to be tried, Neil Young said that this should be assumed. The judge accommodated this, which meant no detailed discussion about the merits of Essendon’s case took place.
Instead, the discussion focused on the second limb of the test, whether the balance of convenience favoured the grant of an injunction restraining any further dealings with the show cause notices pending the hearing and determination of the case.
Here, Neil Young noted the time ASADA had already taken in its investigation, submitting that no prejudice could therefore flow to ASADA if an injunction were granted. This was contrasted to the “Sword of Damocles hanging over the Club and players in the interim.”
Interestingly, Neil Young submitted that, if the injunction were not granted, this would impact the efficacy of the ultimate relief Essendon sought. However, the threads of this argument were not teased out.
Justice Middleton seemed tempted to grant the injunction. As to why, Justice Middletons put squarely to Tom Howe QC for ASADA: “Isn’t it fair to let the court have its time now?”
It is a testament to Tom Howe’s advocacy that he met the judge’s enthusiasm for a “practical” approach with the full force of the legal arguments in his corner. He noted that the public interest was in favour of the statute operating in accordance with its terms, without interference from the court. The players had also, it was submitted, communicated that they were content with the new show cause arrangements. In other words, if those likely to be most directly affected had no problem with the time extension supplied by ASADA, how could Essendon have grounds to complain?
Tom Howe also submitted that it was wrong to ask ASADA why it should not submit to an injunction, and that this was a reversal of the true inquiry. He observed: “Essendon Football Club is not within a bull’s roar of irremediable prejudice” (the onus being on Essendon to explain why its position would be so harmed if the ASADA process were to continue). He also referred to Essendon’s application as being “very very weak”.
That said, Tom Howe offered an assurance that the CEO of ASADA did not intend to take a step prior to trial, although confirmed that the CEO wanted to preserve the option to issue notices should circumstances change, acknowledging this would likely mean the parties would need to return to court.
Justice Middleton determined that the injunction would not be granted.
ASADA HAS A CLEAR WIN
WHETHER PLAYERS SHOULD BE JOINED TO THE LITIGATION
I predicted that this would be dealt with as a preliminary question, and that it was an important issue going to the viability of the litigation brought by Essendon and James Hird. This prediction proved correct. Tom Howe QC for ASADA submitted that the absence of the players from the case posed a “serious potential procedural difficulty” going to the heart of whether the court was “properly constituted”.
It transpired that Justice Middleton would certainly prefer the players to be part of the proceeding, requiring everyone to return to court on Wednesday, 2 July 2014 to resolve this issue once and for all.
As explained in my previous post, there is undisputed case law arising from the Super League NRL dispute in the mid-1990s in which the Full Court of the Federal Court held in favour of News Limited that the trial judge had over-reached by making orders affecting players and coaches not parties to the action.
The effect of this legal precedent is that, whilst Essendon and James Hird might have standing to sue, and even to have issues determined giving rise to declaratory relief (i.e. that ASADA acted ultra vires), if the players are not ‘joined’ to the case the court might refuse to make any orders affecting them.
There are significant problems if the players do not participate in the litigation:
- Even if Essendon and Hird prove that ASADA acted outside its powers, they might not be permitted to obtain orders restraining ASADA from pursuing the show cause notices given that the process could affect the rights and interests of players not involved in the case.
- The court’s decision in the litigation would not bind the players, such that even declaratory relief that ASADA has acted ultra vires would not impact the current process.
- If the players choose not to join the action now, they might be prevented from bringing a fresh claim about similar issues later. That is why Tom Howe QC referred to the risk of ‘issue estoppel’ and ‘res judicata’ (meaning ‘the matter has already been judged’), and why the judge nodded understandingly. These are principles intended to prevent multiple proceedings, unnecessarily wasting the resources of the court.
Essendon and James Hird would prefer for this whole issue to go away.
Neil Young QC for Essendon therefore sought to argue that the joinder principle was only intended to prevent injustice to the party not joined. He submitted that this would only occur if the third party orders adversely affected the players. Yet in the present case, he argued, if Essendon obtained the orders sought (setting aside the show cause notices) then this could only be a good thing for the players.
Justice Middleton intriguingly observed that this ‘benefit’ could not be assumed. He said that a player might want complete exoneration by fully participating in the ASADA process to its conclusion.
Tom Howe QC, opposing Neil Young’s submission, drew the judge’s attention to paragraph 13 of Essendon’s submissions as “emblematic of the difficulty”:
“If entries are made by the ADVRP on the Register of Findings, the Club and the players will immediately suffer reputational damage, and they will be exposed to sanctions for anti-doping violations under the AFL Anti-Doping Code and AFL Player Rules. (emphasis added)
Tom Howe submitted that this encapsulates the real and direct effect on the players of the issues in the case and points to the practical problem of proceeding without them.
Representing the players, David Grace QC submitted that the players do not want to be involved, are concerned about the expense (as parties they would typically be at risk of costs liability if they lost), do not want the stress and wish their anonymity to be preserved.
It is plain that Justice Middleton wants the players to participate in the case if at all possible, and in a manner which meets David Grace’s concerns. In doing what it takes to make this happen, it appears likely he will draw upon section 37M of the Federal Court of Australia Act which enables a court to act flexibly in order to ensure the “just resolution” of the dispute as quickly, efficiently and cost effectively as possible.
However, thinking outside the square can take time, which is why the judge indicated that he would need a few days to think about the best way forward. One option flagged was to allow the action to proceed if the players promised to abide by the outcome.
ASADA WINS POINTS FOR RAISING ISSUE BUT ESSENDON & HIRD ARE STILL STANDING
WILL ASADA NEED TO PRODUCE DOCUMENTS TO ESSENDON & HIRD?
I predicted that this was unlikely. I was wrong. Despite ASADA’s strong objections, the judge will order document discovery from ASADA of some kind, although how much discovery is involved is not yet clear.
Justice Middleton requires the parties to confer about appropriate discovery, and then return to Court next Wednesday 2 July 2014 to deal with outstanding disputes.
The court will first need to work out a way around s.71(4) of the ASADA Act. This provision prohibits the CEO from disclosing National Anti Doping scheme personal information to a court (except under certain circumstances which do not apply here).
Neil Young QC for Essendon flagged a possible route to circumvent this provision, namely, that documents be produced about ASADA’s process and structure, but not about what a person said. The judge added that perhaps prohibited material could be ‘redacted’ (masked). Expect further debate about this on Wednesday 2 July 2014, because ASADA has not yet had its say.
Why is Justice Middleton so interested in ensuring that ASADA produce these documents? The judge stated that there is a clear factual dispute about whether a joint investigation occurred. Justice Middleton would not get hypnotized by semantics, he said (e.g. Essendon referring to it as an illegal joint investigation, and ASADA calling it two separate but coordinated investigations). Rather, he wants to understand the factual dispute by reference to primary material such as objective documents.
ESSENDON AND JAMES HIRD CLEARLY WIN
WILL THE PARTIES BE REQUIRED TO FILE A STATEMENT OF AGREED FACTS?
Yes. Even if there is only agreement about “one fact”, Justice Middleton has insisted that this joint document be filed. He has set a deadline of 31 July 2014 for this.
THE JUDGE REFERRED TO THE PROSPECT OF A MEDIATION IN HIS 17 JUNE 2014 EMAIL. IS THIS LIKELY?
The judge would like a mediation to occur but is not insisting on it. There seemed a marked lack of enthusiasm for this by the parties, at this stage anyway.
James Hird will seek to issue a subpoena requiring Brett Clothier of the AFL Integrity Unit to produce documents and attend court to give evidence at trial. Nick Harrington, counsel for James Hird, made a passionate submission that this was necessary due to ASADA’s apparent rejection in its submissions of a ‘joint investigation’ when surely this could not be the case in light of the nine hour interrogation James Hird had endured with 1300 questions asked (not entirely clear why this is proof of a joint investigation). In any event, there was certainly a strong sense of personal indignation on behalf of James Hird, whereas the tenor of Essendon’s submissions was more objective.
Neither Essendon nor James Hird intend to file any further significant evidence. It is now over to ASADA to file the evidence in support of its case.
Other key dates include:
- 3 July 2014 – James Hird to file his Statement of Claim
- 9 July 2014 – the CEO of ASADA to file his Defence
- 11 July 2014 – Essendon and Hird to file any Reply
SO WHO WON THE DAY?
Everyone! The first rule of being a litigation lawyer is – if possible – walk away with upside. Each party achieved that. The public statements by the parties after the hearing confirm that everyone is happy…
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