Rugby Australia embroiled in ugly court battle as governing body slams ‘misleading and deceptive conduct’
Melbourne Rebels players in a huddle and Rugby Australia bigwigs, Daniel Herbert and Phil Waugh.
Rugby Australia (RA) have fired back at the Melbourne Rebels and are seeking to counter-sue after the axed Super Rugby Pacific side began legal proceedings against the governing body.
On Thursday, the Rebels launched a lawsuit against RA as they look for more than AUS$30 million following their departure from Super Rugby.
Earlier this year, the Melbourne outfit entered voluntary administration after accruing debts of almost AUS$23 million. RA took control of the franchise for the rest of the campaign but decided not to renew their license ahead of the 2025 season.
Rebels claims
On Wednesday, former Rebels directors filed documents in the Federal Court of Australia alleging that RA breached funding obligations.
They also claim that the governing body encouraged the club to continue trading despite being aware of its debts.
However, Rugby Australia have hit back in a strong statement and revealed that they are compiling a counterclaim of their own.
“Rugby Australia is disappointed by the Melbourne Rebels Rugby Union Pty Ltd’s [MRRU] inaccurate and misleading comments in the media and rejects the MRRU directors’ ambit claims and attempts to shift blame for their financial mismanagement,” the statement read.
“RA reiterates that it has complied with all its contractual obligations to MRRU.
“RA is preparing a counterclaim against MRRU and its directors for misleading and deceptive conduct concerning the financial position of MRRU dating back to 2018. Based on that misleading and deceptive conduct, RA granted MRRU a participation licence for the Super Rugby competition and provided associated funding and payments to MRRU.
“Had RA not been misled or deceived, it would not have provided MRRU with a participation licence and thus not lost in excess of $35 million that was paid to MRRU since at least 1 July 2018.
“RA believes that the MRRU directors were knowingly concerned in and/or aided and abetted MRRU’s misleading and deceptive conduct.”
A private consortium led by Leigh Clifford put forward a plan to rescue the Rebels in April, which was supported by the administrator, but that was rejected by Rugby Australia, who duly axed them from Super Rugby.
‘Protecting and promoting rugby’
“Given the insolvency of MRRU, its directors placed it into voluntary administration on January 29, 2024,” Rugby Australia’s statement on Thursday added.
“The Administrator reported that MRRU had accumulated almost $23 million in debt prior to entering voluntary administration and noted that MRRU’s directors may have traded while insolvent from 31 December 2018, which is a breach of the Corporations Act.
“The Administrator also stated that the reasons for the company’s financial challenges were a history of trading losses, lack of readily available alternative funding sources, an excessive cost structure compared to the underlying revenue base, and insufficient revenue generated from non-RA sources including membership, sponsorship and game day receipts.
“RA was notified by the Administrator that the directors of MRRU had received ATO Director Penalty Notices. RA received a garnishee order from the ATO in December 2023. MRRU never informed RA of the Director Penalty Notices.
“After MRRU was placed into administration, RA stepped in to fund all operations of the Melbourne Rebels in 2024, paying player and staff wages, and meeting all associated statutory obligations connected with those payments for the entirety of the 2024 Super Rugby Pacific season.
“As the national governing body, RA will continue to do what is in the best interests of the game nationally and remains focussed on protecting and promoting rugby across Australia.”