Insights into litigation, sports law, media and legal culture

8 reasons why James Hird lost his Federal Court Appeal

On 30 January 2015, in a joint judgment of Kenny, Besanko and White JJ, the Full Federal Court dismissed James Hird’s appeal. Mr Hird had appealed a decision affirming the powers of the Australian Sports Anti-Doping Authority (ASADA) to conduct an investigation into possible anti-doping rule violations by a number of Essendon Football Club players, and into his own role as the Club’s coach at the relevant time. The judgment can be found here.

Readers of the judgment will soon become familiar with the term “we reject”. This term appeared over and over throughout the judgment as each of Mr Hird’s arguments were demolished one by one.

The judge at first instance, Justice John Middleton (whose decision was comprehensively upheld), was a recent raconteur at a lawyers’ dinner about how it felt to be in the public eye during the Essendon case:

“I have found that if a journalist agrees with a decision, he or she refers to me politely as “Justice John Middleton”; if he or she doesn’t agree, it’s either just “John Middleton”, or in one case recently, “Middleton”. So far as public criticism is concerned, perhaps I should be happy that the press have only had a few occasions to comment upon or criticise my published judgments.” (IPSANZ, Brisbane – Random Observations of a Southern Judge or What Does Sport Law Have in Common with Patent Law?)

Given how social media was set alight after the Full Court’s decision, one can predict a few references to ‘Kenny’, ‘Besanko’ and ‘White’ in the near future.

Eight reasons as to why James Hird lost, based in part on my observations, and in part on the judgment’s reasons, are set out below.

1. Appeals are hard

In the Federal Court of Australia, to overturn a judgment you need to persuade three other judges of the same court (there is no distinct Court of Appeal like the Supreme Court) that their colleague is wrong.

The need to point to error is always challenging. In this case, it meant James Hird’s legal team had to demolish, brick by brick, the house Justice Middleton had built. The method adopted was to argue that his legal analysis was wrong, and that the discretionary considerations should not apply.

The discretionary considerations were Justice Middleton’s reasons for saying that – even if wrong – he would not have made orders in the terms sought.

The broad brush attempt to sweep away the discretionary considerations seemed a bold (but perhaps necessary) move.

In any event, whilst statistics are not to hand, one typically advises the client that appeals are hard to win, although they may of course be justified. One is always pushing a barrow uphill.

2. Team did not push in same direction

The Full Court said it best: “Mr Hird has appealed against his Honour’s judgment. There is no appeal by Essendon. Neither the AFL nor any player has sought to participate in the appeal.” at [7]

In other words, these matters did not escape the Full Court’s notice.

3. Failed to convince court that reputation more important than public policy

The personal reputation is James Hird’s to vindicate. The public policy is ASADA’s interest in pursuing potential anti-doping rule violations to uphold the integrity of sport.

When is it likely that personal reputation will trump public policy? When a decision is plainly wrong. Otherwise, expect courts to uphold – and construe broadly – public interest issues mandated by Parliament.

The Court in this case observed: “plainly enough, ASADA had authority under the ASADA Act and the NAD Scheme to investigate a possible anti-doping rule violation”. This, in fact, was not in dispute (at [132]).

Was ASADA’s purpose in conducting the investigation, however, improper? No. The Court confirmed Justice Middleton’s finding that ASADA’s investigation was for the purpose of investigating anti-doping violations and that the nature and conduct of the investigation was lawful. (at [28]).

For this finding to have been successfully challenged, a serious, collateral motive would have likely been required (e.g. ASADA ‘had it in’ for Essendon Football Club, which was not suggested at any stage).

4. Failed to convince court that ASADA and the Australian Football League (AFL) needed to operate at arms length

In a previous post, I have given ASADA personae based on the arguments presented by opposing Counsel. In the James Hird camp, ASADA had the feel of a school principal, autocratic, dictatorial and not requiring much help. In the ASADA camp, ‘group hug ASADA’ emerged, always collaborative, up for team meetings and plenty of bonding with all concerned.

Well, the Full Court were happy with the ‘group hug’ concept. They rejected the idea (James Hird’s) that ASADA should not be “in harness” with the AFL. They supported the idea (ASADA’s) that both could be “in close lockstep” with each other. ASADA’s characterization was said to be “closer to the mark” (at [136]).

This extract from the judgment clearly explains the Court’s position: “The contrary conclusion for which the appellant argued [where the AFL must step out after referring a matter to ASADA] is antithetical to the objects of the NAD [National Anti-Doping] Scheme and the ASADA Act, in so far as they are directed to the implementation of the General Anti-Doping Convention and the UNESCO Anti-Doping Convention, both of which in turn are directed to the prevention and eradication of doping in sport, including through cooperation between regulatory agencies and sporting organisations. There is no basis in any of the relevant international anti-doping instruments to suppose that a regulatory agency such as ASADA should be solely responsible for investigations into anti-doping matters. Indeed, this would be inconsistent with the affirmation in these instruments that cooperation between regulatory agencies and sporting bodies is important if anti-doping measures are to succeed.” (at [167]; see also [127-129])

The judges emphasized that they did not consider that the legislative scheme contemplates this line of demarcation between permissible and impermissible sporting administrative body cooperation. The form of the cooperation that ASADA might require is left to ASADA to determine, having regard to all the circumstances of the case. (at [173])

The Full Court reached this view because:

  • ASADA needed to make its own decisions to be independent, and there is nothing to suggest it did not do this.
  • The concept of cooperation does not eradicate this kind of independent thinking.
  • The ASADA Act and NAD Scheme contemplated a collaborative approach.
  • Section 15 of the ASADA Act demanded that the AFL’s sporting administrative body rules contemplate a close and cooperative relationship.
  • Cl 2.04(j) of the NAD Scheme required the AFL, “to refer all instances of possible anti-doping rule violations to ASADA for investigation and cooperate with any investigation, as required” (emphasis added). (see [136-139]

On the question of international instruments, ASADA lost the battle but won the war. The judges did not consider them to be incorporated as law into the ASADA Act, noting this was perhaps contrary to ASADA’s submissions. However, they added that these international instruments illustrate, like the provisions of the ASADA Act and the NAD Scheme, the importance of effective cooperation between anti-doping regulatory agencies and sports organisations in preventing doping in sport. (see[144]) This is exactly the outcome ASADA sought.

5. No plausible reason for limiting the construction of the ASADA Act

The biggest problem for James Hird was that the language of the ASADA Act was broadly permissive, not prohibitive. In other words, there were not many words in the Act like “ASADA’s CEO must not”. Instead, there was a great deal of “ASADA’s CEO can do whatever he or she likes” (i.e. conduct which is “convenient”, “incidental”, or “conducive” to his or her functions: s.22).

This meant that, to succeed, James Hird needed to show that what lay between the lines prevented ASADA from behaving in the way it did. The Court recognized this challenge:

As will appear, the relevant provisions of the ASADA Act were straightforward enough. The difficulties in construing these provisions do not arise from what the Act says. Instead, they arise from what the Act does not say.” (at [94])

6. AFL contractual arrangements remained the elephant in the room

Those contractual arrangements proved to be a large elephant indeed.

The Court pointed out, once again, that James Hird and the 34 Players entered into a contractual arrangement with the AFL, which the appellant accepted at trial required them to cooperate not only with the AFL but also with ASADA, including by attending interviews and answering questions. (at [8])

The primary judge found that they were “only obliged to adhere to the ‘compulsory powers’ of the AFL because they have each agreed to do so by voluntarily and consensually being bound by a contractual regime”. This contractual regime included the AFL’s Player Rules and Anti-Doping Code. (at [14]).

Of course, there is nothing unusual about the use of contractual powers to ensure cooperation by athletes with the relevant anti-doping code. Lance Armstrong had under his belt numerous failed legal attempts to challenge the constitutionality of USADA, before he ultimately fell on his sword. Against him was the fact that all athletes who purchase a licence to race from USA cycling, must agree to know and abide by the rules and procedures set forth by USADA. For more information, see an interesting article from PodiumCafe.com pointing out that of all the attempts by athletes to challenge the constitutionality of USADA in the United States, none have succeeded.

Ultimately, James Hird had to live with the choice he had made at the outset, not to join the AFL as a party to the litigation. Perhaps this is a decision he will regret, based on an argument he sought, but was not allowed, to present on appeal (see Item 7 below).

To illustrate how the choices we make along the way can impact an outcome, it was James Hird’s decision to settle with the AFL, after the AFL had brought charges against him under its own contractual regime for bringing the game into disrepute, which meant the AFL could not be a party to the case.  Part of the settlement involved releasing the AFL from any claims in connection with the matter.  See my previous post explaining this further.

7. Inconsistently presented argument

The Full Court observed that James Hird’s “arguments in support of his appeal varied from time to time over both his written and oral submissions. What follows is a synthesis of their various forms.” (at [41])

A comment such as this is rarely a good sign. Consistency is key.

It is likely this comment was directed to some swerving from James Hird’s legal camp about whether the AFL’s contractual powers should be challenged on appeal, or not.

In essence, somewhere along the path of this litigation (possibly after Justice Middleton’s judgment…), it became plain to James Hird’s legal team that it would be much harder to win by attacking the legality of only one participant’s conduct in the alleged offending ‘joint investigation’ between the AFL and ASADA.

At first instance, the tactic had been to ‘confess and avoid’. No challenge was made to the breadth of the AFL’s compulsory powers.  These were a product of the AFL’s contractual relationship with players and other stakeholders of the game.  This is illustrated by the following exchange between Mr Hanks (senior counsel for James Hird) and Justice Middleton, which the Full Court considered sufficiently important to extract in its judgment:

HIS HONOUR: And no one is suggesting anything the AFL has done is wrong…

HIS HONOUR: No one is suggesting that the AFL can’t force people to answer their questions, are they? I don’t gather that[…]

MR HANKS: That’s not part of the case, your Honour.

HIS HONOUR: Not part of the case.

MR HANKS: No.

HIS HONOUR: So self-incrimination is well and truly out the window as far as the AFL is concerned.

MR HANKS: As far as the AFL is concerned it has got contractual powers over the players and the support staff. [158]

For the appeal, however, the strategy had changed.  Wily Tom Howe QC, ASADA’s senior counsel, picked up on this straight away. James Hird’s decision now to question whether the AFL could, for instance, continue to assist ASADA after referring a potential anti-doping rule violation to it, was subject to a sustained attack.

Eventually, at the very end of Day 2 of the appeal, Mr Hanks abandoned any further pursuit of this contractual argument. See my post on Day 2 of the appeal which shows the nature of Mr Howe’s attack, and Mr Hank’s eventual response.

In its judgment, the Full Court accepted the foundation of Mr Howe’s attack, finding that ASADA submitted, “fairly in our view”, that the CEO would have conducted the case below differently and have sought to adduce evidence relevant to the issues now in dispute regarding the AFL’s contractual powers. Furthermore, the AFL, which would be affected by any ruling on this issue and may want to be heard and make submissions, was not a party to the proceedings below and is not a party to this appeal. (at [162])

Otherwise, the Full Court had a bit to say about parties who decide to change their strategy between the initial hearing and an appeal.

On appeal before the Full Court, Mr Hird argued that the primary judge was mistaken about the existence and use of the AFL’s compulsory contractual powers. We decline to entertain this submission on appeal. Generally speaking, a party to an appeal is bound by the way that party conducted the case at trial; and a point cannot be raised for the first time on appeal when it could possibly have been met (as here) by calling evidence at trial”. (see Summary)

As to Mr Hanks’ decision to abandon Mr Hird’s challenge to the nature and breadth of the AFL’s compulsory powers, the Full Court stated: “this concession was properly made. Parties are bound by the way a case is conducted”. (at [161]).

A ‘concession’ which in this case was made by James Hird’s Counsel right at the end of the appeal hearing, is usually made after a party has tried to have a bet each way but then realized that the strategy is not working. Here, James Hird had submitted that the primary judge misunderstood the effect of the contracts between Mr Hird and the players on the one hand and the AFL on the other. (at [163])

8. Complained too late

In short, all of James Hird’s points which were directed to ‘what happened in the interview room’, went nowhere because everyone was on notice by ASADA that the questioning would take place, everyone had access to legal representation, and no one objected to answering the questions at the time.

The position might well have been different, the Full Court indicated, if an individual had expressly reserved his right to complain later, at the time he gave his answers (answering under protest). But no one did this.

At best, the Full Court noted counsel for Mr Hird raised a question about the validity of the “joint investigation” at Mr Hird’s interview. However, the judges added, the issue was effectively put aside when Mr Hird agreed to proceed with the interview, without expressly or impliedly reserving his position. (at [22])

The Full Court endorsed Justice Middleton’s finding that the AFL and ASADA conducted concurrent but cooperative investigations. The judges acknowledged that the advantage, so far as ASADA was concerned, was that the interviewees were subject to the compulsory powers of the AFL under their contracts with the AFL and might therefore be compelled by the AFL to answer questions at interview truthfully. However, they found that this advantage did not turn an otherwise lawful acquisition of information on ASADA’s part into an unlawful acquisition: “It was not an advantage that was in any sense unfairly obtained”.

The Full Court also agreed with the primary judge that, on the facts as found, none of the non-disclosure provisions to which the appellant referred was engaged, because information was disclosed to the AFL by the interviewees directly. The information was not disclosed by ASADA. The fact that these provisions were not engaged does not mean that ASADA unlawfully side-stepped them, the Full Court found. It signifies only that ASADA’s representatives did not infringe them in the interview room, when they received information from the interviewees in the presence of the AFL (at [183])

The Full Court added: “Senior counsel for the appellant sought to turn his submission on side-stepping the non-disclosure provisions into a complaint that there was an “automatic and unconsidered disclosure” in the interview room. This characterisation of what occurred does not withstand analysis when it is recalled that it was Mr Hird or one of the 34 Players, not ASADA, who was making the disclosure. None of the provisions in question governed disclosures made by a person other than an “entrusted person” in the case of s 71 or ASADA in the case of cl 4.21.” (at [184])

The judges was also blunt in their rejection of James Hird’s argument that he had not been given the chance to avoid answering questions on the grounds they might self-incriminate him. (at [199]). His biggest problem was that he chose to answer them.

As the Full Court said, it was not disputed that ASADA was entitled to ask questions of a person in its investigation of possible anti-doping rule violations and, where a person chose to answer, it could lawfully receive the information. It was also not disputed that ASADA had no power to compel a person to answer. (at [189]).

Once again, the compulsory contractual powers of the AFL reared their head at this point. The Full Court noted that they included the power to require players and personnel, such as James Hird, to cooperate with an investigation and to answer questions. The judges also reminded the reader that this was not in dispute before the primary judge. They held that Mr Hird should not be permitted to put the effect of these contractual arrangements in issue on appeal. (at [190]).

Next steps

There are three key concluding points.

AFL Tribunal

First, ASADA may rely on the player and support personnel transcripts at the AFL Tribunal hearing currently on foot. There is no question mark over the validity of this, and all other material gained in the ‘joint’ investigation, for the time being at least.

Costs

Secondly, the appeal has been dismissed with costs. This means James Hird must pay ASADA’s legal costs of the appeal, in addition to his own legal costs. It goes without saying that these are the sort of legal costs likely to break the bank. In addition, there are ASADA’s costs from the first instance hearing, which Mr Hird is jointly liable to pay with Essendon Football Club. Expect these costs to exceed $1 million in total.

High Court special leave application

Thirdly, should James Hird wish to do so, he can throw the dice and see whether the High Court will grant him special leave to appeal.

How might his employer respond to this given Essendon Football Club and James Hird took a different approach to the appeal, with the former not pursuing its legal rights whereas James Hird decided to proceed?  To be frank, it is hard to see how the Club could put any impediment in Mr Hird’s way, based on such a decision alone.  He was the coach then.  He is the coach now.  He decided to pursue his legal rights then.  He may decide to continue to pursue his legal rights – in relation to the same subject matter – now.  If Mr Hird was required to persuade Essendon Football Club that his decision to pursue his appeal did not interfere with his contractual duties as coach of the Club, then one would think the same reasoning would continue to apply.

Importantly, James Hird has no automatic appeal rights to the High Court. To obtain special leave, which is a significant application unlikely to cost less than $100,000 in its own right, Mr Hird will have to show several judges of the High Court why four judges to date are wrong, and why it is in the public interest for the High Court to hear the case.

Special leave applications usually take about six months to be heard.  If granted, an appeal can expect to follow some months later, with judgment some months after that.  In other words, this saga would likely continue for another year.

For every ten special leave applications, only a couple will make it through. The High Court also hears high profile matters all the time, so this case would not be in a special category. Simply put, if the High Court considers it a waste of time to hear an appeal because they think the judges below got it right, they will not do so.

This may not deter James Hird from seeking special leave, as is his right. With so many sunk costs, why not spend a little more with the prospect of a windfall gain should special leave be given? It is also not unheard of for the High Court to take a different view from a unanimous position below.

4 Responses to “8 reasons why James Hird lost his Federal Court Appeal”

  1. Mike Anger

    Natalie, thank you for your summaries of this saga.
    It is refreshing to encounter such enlightenment amid a sea of ignorance and jingoism.

    Reply

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