The directors of the now-defunct Melbourne Rebels rugby club have launched a legal battle against Rugby Australia, seeking A$30 million (R355m) in damages over the club’s closure.
According to a report by the Sydney Morning Herald, the case, filed in the Federal Court, also demands that control of the club be returned to the directors so the Rebels can continue competing in Super Rugby Pacific.
Rugby Australia shut down the Rebels in May following failed mediation attempts, leaving the club’s creditors owed A$23 million, including A$11.5 million to the Australian Taxation Office (ATO). The directors had been warned by the ATO that they could be personally liable for the debts, which has become a key issue in the legal dispute.
A private equity consortium, led by Leigh Clifford, father of Rebels director Georgia Widdup, had proposed a rescue plan to inject A$30 million into the club, but Rugby Australia rejected the plan.
This led the Rebels’ directors to accuse Rugby Australia of unfairly favouring other clubs, particularly the NSW Waratahs, in their financial management decisions.
In a strongly worded statement, the Rebels’ directors expressed their distrust of Rugby Australia, alleging the organization violated company laws and failed to treat all member clubs equally. They claim Rugby Australia is legally obligated to indemnify the directors for the tax debts and other liabilities that arose while the Rebels players were part of Rugby Australia’s teams.
The directors are also demanding access to Rugby Australia’s financial records to investigate whether the union breached its fiduciary duties. They argue that Rugby Australia has misused its assets, citing excessive spending at the 2023 Rugby World Cup.
Rugby Australia has yet to respond to the claims but has acknowledged it will review the statement of claim before commenting further.
Photo: Hagen Hopkins/Getty Images
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Src: sarugbymag.co.za
