Almost five months after deciding to chop the Rebels from Super Rugby, the gloves are now firmly off, with the Melbourne franchise taking Rugby Australia to court.
The Roar can reveal that the Rebels lodged their statement of claim in the Federal Court of Australia on Wednesday.
It’s understood the Rebels, who fell into voluntary administration on January 30 after amassing debts of around $23 million, are seeking more than $30 million in damages and, ultimately, want to return to the playing field.
Twelve months after the Wallabies’ worst World Cup result, the legal action once again puts RA on the back foot.
Any damages could cripple RA, especially with the governing body already in the red after withdrawing more than three-quarters of their $80m debt facility from last November with Pacific Equity Partners. RA hopes to repay its debt from the profits from hosting the British and Irish Lions next winter.
But another drawn-out legal battle could hurt the governing body.
The Rebels claim “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 incurred when Rebels players were playing for Rugby Australia teams.”
The Rebels are seeking an urgent order granting them the right to inspect the RA books, including accounting and loan records, to determine whether there has been fiduciary and governance failures by Rugby Australia.
The proceedings have been undertaken by Melbourne Rebels Rugby Union Pty Ltd.
Counsel for the Rebels includes Philip Crutchfield KC, Harry Forrester, tax specialist Gareth Redenbach and Alexander Di Stefano.
In announcing their decision, RA highlighted that “The Administrator also noted that MRRU may have traded while insolvent from 31 December 2018.
“Since the Rebels’ inaugural year in 2011, MRRU has not been independently financially sustainable despite significant additional investment by RA over and above committed club grants. There is nothing in the Consortium’s proposal which demonstrates with sufficient certainty that this will change.”
In a scathing document seen by The Roar, the Rebels claim the governing body acted unconstitutionally by not acting in the interests of all members by keeping the rugby flame alight in Melbourne.
The Rebels not only claim RA was aware of their financial situation at “all times”, but also that there is “extensive evidence” they were assured that a large private equity deal was imminent and would provide a financial lifeline to rugby in Australia.
Although RA decided to take out an $80m loan facility, the Rebels claim the governing body gave preferential treatment to some Super Rugby franchises, such as the Waratahs and Brumbies, over the Rebels.
“There is no trust and confidence in the board and management of Rugby Australia. Their conduct needs to be both exposed and explained,” a statement provided from the Rebels to The Roar says.
“We are fighting to not only save the professional men’s and women’s Rugby teams, but to maintain the successful pathways from grassroots junior Rugby in Victoria through to the elite level.
“We are grateful for the incredible support we have received from the Victorian Government who also understand the importance of a professional team to the boys and girls in Victoria. Over two decades the Victorian government has provided significant funding to Rugby Australia to facilitate the development – not only of 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.”
An RA spokesman said until they saw the statement of claim the governing body could not comment.
The timing of the legal action once again puts RA on the backfoot in the midst of their broadcast negotiations.
With the current $29m broadcast deal to finish at the end of 2025, RA wanted to have their negotiations wrapped up over the next six months. Adding to the desire to get it across the line sooner rather than later is the NRL will likely kick-off their negotiations in the second quarter of next year.
But any legal action, coupled with the Wallabies not winning consistently on the field, will continue to harm the vibe’s game across the country before next July’s showpiece event against the British and Irish Lions.