Melbourne Rebels sue Rugby Australia

Axed Super Rugby club takes Rugby Australia to court claiming the franchise has received prejudicial treatment from the governing body.

Rugby Australia chief executive Phil Waugh and chair Daniel Herbert in Melbourne in May announcing the closure of the Melbourne Rebels Picture: Getty Images

The Melbourne Rebels are suing Rugby Australia, claiming it was unfairly axed from Super Rugby while also outlining plans to re-enter the competition.

The Australian understands the Rebels will be seeking more than $30m in damages from the governing body.

The Rebels are also seeking an urgent order in the Federal Court granting it the right to inspect the books of Rugby Australia, including accounting and loan records, to determine whether (and the extent to which) there has been fiduciary and governance failures by the governing body.

Melbourne Rebels directors released an explosive statement on Wednesday saying RA had failed rugby in Victoria.

“The Melbourne Rebels are seeking significant damages and indemnities from Rugby Australia along with a declaration that they are entitled to resume control of the Rebels so the team can continue to play in the Super Rugby competition,” it read.

Rebels players form a huddle after the Super Rugby Pacific quarterfinal against the Hurricanes in June, the club’s final match. Picture: Getty Images

“The Rebels are a member of Rugby Australia and had a legal expectation that they would not only be treated fairly but that they would be treated equally to other members. Amongst other things, the Rebels will assert that Rugby Australia has breached various section of the Corporations Act, has unlawfully oppressed the Rebels and is obliged to indemnify the Rebels for liabilities to the Australian Taxation Office (ATO) (as well as other broader employment liabilities) incurred when Rebels players were playing for Rugby Australia teams.

“The Rebels are seeking an urgent order granting the Rebels the right to inspect the Rugby Australia books, including accounting and loan records, to determine whether (and the extent to which) there has been fiduciary and governance failures by Rugby Australia.

“The Constitution requires that the assets of Rugby Australia be applied for the benefit of all members. The Rebels believe that this has not been the case and that there has been unacceptable and unauthorised spending (perhaps best exemplified by the unauthorised and excessive spending at last year’s Rugby World Cup and the subsequent suppression of the Rugby World Cup independent report).

“We want an independent person to decide whether the conduct of Rugby Australia meets the standards required by law – and that will now be a Federal Court Judge.

RA announced the axing of the Rebels in May after it was revealed over last summer that the organisation was over $20m in debt and had outstanding liabilities to the ATO. The Rebels at the time laid the blame at RA, claiming that Super Rugby franchises had been chronically underfunded by the governing body as the sport emerged from the financially crippling Covid period.

Counsel for the Melbourne Rebels includes Philip Crutchfield KC, Harry Forrester, tax specialist Gareth Redenbach and Alexander Di Stefano.

“The Melbourne Rebels Directors, all unpaid volunteers, will be providing the court extensive documentation demonstrating that Rugby Australia was aware of the financial situation of the Rebels at all times,” the statement goes on to read

“There is also extensive evidence of Rugby Australia executives and Directors continuing to reassure the Rebels (and other clubs) that a large private equity deal was imminent and would provide a financial lifeline to Rugby in Australia.

“Rugby Australia did secure an $80m loan facility but they chose only to provide funding, indemnities or other financial support to the NSW Waratahs and subsequently the ACT Brumbies in preference to the Melbourne Rebels.

“The Rugby Australia Board and executives don’t seem to understand that Rugby Australia is a union of members. The Rugby Australia Board has a legal obligation to act in the interest of all members, they do not have the ability (or legal right) to pick and choose the Clubs and/or States they wish to survive and those that they wish to destroy.

There is no trust and confidence in the board and management of Rugby Australia. Their conduct needs to be both exposed and explained.

RA have had many months to explain their actions and have failed to do so. The Rebels Directors believe that the simple reason for this is that there is no defence to their conduct.

They state they are not only fighting to save rugby in Victoria but of the broader national game.

“The conduct of Rugby Australia in destroying the Rebels – the men’s and women’s teams – demonstrates an appalling lack of Judgement by the national body,” it reads

“The Directors have reserved their right to seek future compensation from RA for personal damages inflicted on them by RA.

“With backing from the Private Equity backed consortium, the Rebels can be back on the field at a new home in Tarneit in Melbourne’s western suburbs as soon as the Court clears the path.”

RA is yet to respond.