u/chipsywood

Bombshell claims have been aired in the Federal Court that the Melbourne Rebels attempted to secure $10 million from the Victorian Government, which they were then going to use to pay their overdue tax bill of nearly $12 million.

Rugby Australia’s barrister, Tony Bannon SC, made the claim in his opening address as the governing body hit back at the Rebels, who launched legal action after the club was axed from the Super Rugby Pacific competition in 2024.

Rebels chairman Paul Docherty is due in the stands on Thursday, and will face cross examination and claims that he allegedly sent RA chief executive Phil Waugh an email on August 22, 2023, suggesting the Victorian Government could be convinced to hand out $10 million of taxpayer money to the club.

“Their focus, Your Honour, we’ll hear when one considers all the evidence on saving their position, was getting a $10 million grant from the Victorian Government, that was who they were looking to,” Mr Bannon said.

“And the effect of what their efforts were, and they believed they had influence with the government, particularly Mr Doherty, was that they would persuade somehow rather the Victorian Government to pay the Rebels’ debt owed to the Commonwealth Government, rather reverse of most budget allocation debates and premiers conferences, but that is what they were pursuing and focusing on, and ultimately a misguided hope.”

The Rebels failed to secure any additional funding from the Victorian Government.

The Rebels entered voluntary administration in 2024, with $21.9 million of debt, including $11.7 million owed to the Australian Taxation Office.

It is RA’s claims that discussions between Mr Docherty and Mr Waugh indicated that if there was to be any takeover of the club by the national union, it would occur once their debts had been cleared.

Mr Bannon quoted from an email allegedly sent by Mr Docherty to Mr Waugh, telling the court: “I want to reiterate our discussions in the position we are trying to take here for the benefit of everyone to ensure centralisation works for RA and the Melbourne Rebels. We do not, did not, have never expected RA to take on the liabilities on our Rebels balance sheet. Nor is that legally possible to do unless you bought the shares out of the business while that liability was still there, something I wouldn’t personally advise any director to do.”

RA also rejected claims from the Rebels that they were kept in the dark about a proposed plan to merge them with New Zealand-based team Moana Pasifika, to call the new team Rebels Pasifika.

Reading from Mr Docherty’s affidavit, Mr Bannon quotes the former chairman writing that his board supported the merger: “The board requests RA accelerate the commencement of the restructuring of the Rebels with Moana Pasifika to become the Melbourne Pasifika Rebels.”

A participation letter sent by RA to the Rebels in July 2023 had mentioned that as part of the 2025 British & Irish Lions series, the touring side would play against “Rebels Pasifika”.

RA’s claim is that there was no query or complaint from Docherty, Rebels chief executive Baden Stephenson, or any club officials about why a merged team appeared in an official proposal of scheduled games for the Lions tour, after the Rebels had submitted to the court earlier this week they were blindsided by the merger idea.

Mr Bannon said the fact five former Rebels directors – Georgia Widdup, Tim North KC, Lyndsey Cattermole, Neil Hay and Gary Gray – were not involved in these proceedings suggested the board wasn’t united in its views, but rather this case reflected the thinking of Docherty.

“The only evidence you’re going to hear from is from Mr Docherty and (fellow board member) Mr (Owain) Stone,” Mr Bannon said.

“You’re not going to hear from, and missing in action are, the other five living directors.

“The idea you could prove a relevant mind of the company, where not only, only two people say anything about it all … the other five obviously admit of all the usual inferences.”

Earlier on Wednesday, the Rebels’ barrister, Bernard Quinn KC, played a video of Waugh addressing Rebels members at a function in Fitzroy in November 2023.

Mr Quinn suggested Mr Waugh misled the group by talking about longstanding partnerships, while aware that the Rebels faced financial challenges RA could not support.

The matter was briefly adjourned just before noon while legal assistants figured out how to play the video of Waugh without reverberation throughout the courtroom.

In the video played to court, Mr Waugh said: “We’ll only get better as a code and as a game if we work together. And I think that what we’re doing here with our partners, and I always talk about partnership, not about being a one- or a two-year deal … but I genuinely think we’re all in this for the long haul.”

Mr Quinn said: “What you could infer from that was that in any forum which involves discussions where there’s Mr Stephenson and Mr Docherty there, you don’t talk about the club as if it’s got an endless future and is part of the ongoing competition for the long haul if it’s not going to be the case. It gives a flavour to the lack of disclosure that in official forum.”

But Justice Cameron Moore, who is presiding over the case, hit back at that claim.

“He’s supposed to communicate at a function like that, which is obviously a lighthearted event?” Mr Moore queried.

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“Whether it’s an after-dinner speech or in a drinks function, but it’s not an event where you set out to talk about structural changes.

“There may be other occasions where that type of discussion is appropriate.”

The case continues.

The cross examination of Docherty will be enlightening.

Rugby Australia signed off on a “seismic” secret plan that would have structured the game to favour NSW and Queensland at the expense of other states.

The secret plan, titled Winning Rugby, amounted to a brutal recasting of the sport in an attempt to boost the national side and is expected to form a key part in the grilling of RA chief executive Phil Waugh in the Federal Court on May 18.

Waugh is a star witness in the lawsuit brought by the directors of the now-defunct Melbourne Rebels that alleges RA acted unfairly by withdrawing support for the club during its 2024 financial collapse.

Former RA chief operating officer Richard Gardham and former RA chief executive Andy Marinos will also be called to give evidence during the three-week trial in Sydney.

The Rebels were stripped of their licence by RA in 2024, months after the club entered administration under the weight of about $23 million in debt, including $11.5 million owing to the Tax Office and another $6 million owing to members of the club’s high-profile board.

The proceedings could offer an unprecedented look into the inner workings of one of the country’s most powerful sporting governing bodies, shedding new light on why RA chose to provide emergency funding to NSW Super Rugby team the Waratahs and the ACT’s Brumbies.

Waugh, who has championed a “centralised” high-performance model since taking the helm, is expected to answer claims that the Rebels were victims of a predetermined strategy to diminish the role of the club in the league rather than market forces.

RA is vigorously defending the claim. A spokesman said it had always fulfilled its obligations to the Rebels and insisted the Winning Rugby plan was never implemented.

“As custodians of the game, RA took necessary steps to safeguard the broader Australian Rugby community from the crippling debts incurred by the experienced businesspeople, lawyers and accountants that constituted the board of MRRU [Melbourne Rebels Rugby Union],” the spokesman said.

Central to the Rebels’ case are internal documents usually marked confidential, including board minutes and Winning Rugby, a confidential strategic proposal put together by Waugh and Gardham.

The document was put to the RA board in July 2023, just months before the Wallabies’ horror showing at the 2023 World Cup in Paris.

The proposal outlines a plan to revolutionise the competition by centralising Australia’s elite talent into three powerhouse teams to improve the performance of the national squad – a move that would have allegedly harmed other teams in the competition, including the Rebels.

“[The restructure] is a seismic but arguably necessary change in direction for the governance, management and delivery of professional Rugby in Australia. It challenges the status quo and the belief that all teams are treated equally,” the document says.

RA has said in its defence to the claim that the plan was discussed and some elements in it were approved by the board at the July 23, 2023, meeting, but the organisation never implemented the deal.

Extracts of Winning Rugby have been included in court documents filed in the case, but the full document has not been released.

“Reds and Waratahs, as the primary markets for both players and fans, the focus will be on retaining talent at home to create narrative and connection with local markets and concentrate the majority of the potential Wallabies, from a high-performance perspective, within Australian Rugby’s core markets,” the Winning Rugby document states.

According to the proposal, the Brumbies would retain their established role as a high-performance club with strong talent scouting and development role with “a team sourced from local market and players identified as nationally significant and requiring starting position opportunities and specific performance development”.

Under the plan, WA franchise the Force was to be given a higher salary cap to allow it to recruit more players from overseas.

As for the Rebels, the documents suggests the team could merge with the struggling Moana Pasifika team (which announced in April that it would fold), “to activate the expat Pasifika community in Melbourne and provide a clear point of difference in the market and ownership of the pathway in Victoria”.

The Rebels allege RA shared information about its funding capabilities with the financially challenged Waratahs and the Brumbies clubs and not the Rebels despite knowing of the Melbourne club’s solvency issues since May 2023.

The Rebels claim this was because RA assumed Rebels president Paul Docherty would continue to privately fund the club. Docherty declared himself bankrupt in 2025. The Rebels allege that after RA endorsed this secret plan, it still let the club’s directors think that the sports governing body supported the club.

This included Waugh gushing over the role that the Rebels played in supporting the sport in Victoria at an event in November 2023 – two months before the Rebels went into administration – and hugging Docherty in front of the crowd.

“Everything you are doing in this jurisdiction in this region is bringing that connection closer together ..., I genuinely feel as if the game is as united as it’s ever been.”

Victorian Minister for Sport Steve Dimopoulos said on Sunday that the state government remained committed to the game.

“The way Rugby Australia treated the Rebels showed me they did not care for Victoria and the rugby tradition at that time. I have made my views known to them very clearly, and I remain committed to the people who love the sport in the state.”

An RA spokesman insisted it had continued to support the Rebels despite the team’s financial troubles – which it says were caused by the club’s directors.

“Despite receiving more funding from RA than any other Super Rugby club, MRRU was found by an independent administrator (whom the MRRU directors appointed) to have been trading insolvent since at least December 2018 with debts exceeding $23 million. Furthermore, each director is now personally liable for tax debts exceeding $10 million.”

The spokesman said the directors of the club were “once again leaning” on the Australian rugby community to pay for their personal liabilities.

“These are the same directors who deserted the club, its fans, players and staff in January 2024. RA then funded the running of the club for the duration of the 2024 Super Rugby season.”

Rebels director Georgia Widdup said ahead of the trial that the Rebels’ case would outline how RA was kept informed of the club’s financial position through regular updates – something RA denies.

“Whilst RA has made many allegations in the media about the lack of financial information, the test will be how it effectively rebuts the detailed evidence that will be produced by the Rebels,” she said.

“RA withdrawing support from the Rebels was a direct consequence of a series of inexplicable financial decisions RA had made over a number of years which, we believe, had put the sport in a catastrophic financial position.”

Last month, RA announced it had pulled off a financial turnaround in its 2025 results off the back of the hugely successful British and Irish Lions tour, allowing it to pay out $80 million in debt while also posting $70.6 million annual profit, compared to a $36.8 million loss a year earlier.

I'm no legal eagle but this doesn't feel like the smoking gun it's painted as. I spose it bumps up the inevitable settlement by a $mill?

So a disappointing campaign but there's still plenty of positives to take out of it. Thoughts and feelings from my end for discussion.

Positives:

- We've built some depth. Before this campaign there'd have been some doubts around whether Jobsy, Harris, Blank and Whitfield were up to this and I think we can say these 4 are.

- There's a lot of quality to potentially come back in for the Champs in Georgia - Pritchard, Conway, Charlie and hopefully Leota and Lemoto. Goldsbrough and Grenfell would be nice to have available but seem unlikely and Uys would be huge to have but saw that he had a surgery, so seems very unlikely. That's over half a team of starters that weren't there so I'll take a hit of copium and say things will be better come July.

- Fowler looks back up to speed so great to have two flyhalves that can do the job

- Jacques is starting to look like real trouble for any opposition at 13. I'd love for him to see a bit of 1st Grade Shute action in the run up to the July

- We can really run up the phases and our backrow is outstanding at getting over the gain line. It's nice watching an Australian team play on top so well.

- Both Langi's, Ross, Fonua, Cleverley, Brial, Le Maitre, Grover, Mackay, Geros and Jacques all look like they've got the potential to play Super Rugby.

Negatives:

- Discipline, discipline, discipline...

- Even taking away the sternum stuff, far too many soft penalties.

- We have a tendency to release pressure really easily through the aforementioned discipline or poor execution. Not enough edge about these boys.

- Watters looks like he's gone backwards the poor bloke.

- We look really shaky as a scrum against shorter props.

- Lineout. Looks to me like we don't have a strong caller. Ross needs to do some homework here.

- Maul. They need to get more dog in them here. Thankfully the Argie game wasn't as passive as the Bok one but still...

Learnings:

- We need to bring in Leota as a TH option and I'd seriously consider Hepi as a LH option. We need to be able to combat different pictures at scrum time and Leota/Hepi will help us manage height against the shorter, powerful scrummagers that we are struggling against. From what I remember of the French props they are big units so Langi and Hill should be more comfortable against them.

- We need to balance ball carrying with breakdown work (on both sides of the ball). Not an easy thing to do with this group.

- Inside centre needs to be bedded down. I'm not sure what they see in Takai, he looks at sea in defence. Fittler has holes in his game as well so the coaches need to figure out pretty quickly whether Pritchard will line up there or fullback. This was the main position I hoped would become clear as to who should be there through this tournament and it has not...

- We need a fullback with a strong kicking and aerial game.

I haven't seen anyone in colts footy in Brisbane that should be rushed in. Anyone seeing someone in Shute that should get a look in?

"This masthead understands they’ll both get at least $4 million, with the eventual height of the ceiling depending on a few commercial factors."

"Kirk won’t do RA’s bidding, but in his role as NZ Rugby chair - and several sources have told this masthead that board is a bit lightweight and run by Kirk - he has clearly advanced a new philosophy of mutual benefit between Australia and New Zealand, replacing the zero-sum game that characterised the tense years between Hamish McLennan and Robinson."

"Aside from the multimillion-dollar payoff, this masthead has been told that one reason NZ Rugby backed the Anzac Day concept was to support RA’s desire for a new calendar event that would generate interest in the constant battle for attention against the NRL and AFL. That empathetic approach has Kirk written all over it."

"However, it points to a closer relationship between Australia and New Zealand in an era of shared challenges.

The NRL is no longer just Australia’s problem - it has landed on New Zealand’s plate. And South Africa have left them both behind, on the field and in the competitions they play."

This is promising. Gotta wonder though how this new found spirit of cooperation will go if the global calendar looks like it is becoming a thing.