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Storm directors launch legal action

14/05/2010 06:31:51 PM Comments (0)

The Melbourne Storm's independent directors will argue in court that the NRL acted unlawfully in handing down its sweeping penalties for the club's salary cap breaches.

The four independent directors of the Storm - chairman Rob Moodie, Petra Fawcett, Peter Maher and Gerry Ryan - have made a unanimous decision to commence legal action against the NRL and on Friday lodged a writ with the Victorian Supreme Court.

A directions hearing has been scheduled on May 21 before Justice Tony Pagone.

The directors will claim that the penalties, which include stripping two NRL premierships, a massive fine and wiping all points for this 2010 season, were made in breach of the NRL Rules and were therefore invalid.

They want an injunction restraining the NRL from imposing the penalties and are also seeking costs.

Speaking at a press conference at the office of their Melbourne law firm Arnold Bloch Leibler, Moodie read from a prepared statement before taking limited questions.

"The NRL's decision-making process was not fair, impartial or transparent," he said.

"The NRL also did not provide the club with an opportunity to obtain independent legal advice before imposing penalties or to argue about the appropriateness of the penalties that should be imposed."

NRL chief executive David Gallop came out swinging on Friday night, slamming Moodie and his fellow directors for a backflip less than a month after standing shoulder to shoulder in condemning the systematic rorting of the cap.

"Three weeks ago the same directors held a board meeting and decided to accept the very penalties that they are now back-flipping on," Gallop said in a statement.

"The club chairman who today faced a media conference to challenge the penalty is the same person who accepted the penalty on April 22.

"For the same person to today suggest the process was anything but fair, transparent or impartial is an outrageous allegation."

The NRL went even further, revealing their investigation into the $1.7 million rort was showing that figure could be even higher.

"To do so at a time when ongoing investigations indicate that the size of the breaches is growing weekly is even more offensive," Gallop said.

News Ltd, which owns the Melbourne Storm and are part-owners of the NRL, issued a statement on Friday afternoon saying they will not support or fund the legal action.

They said they are waiting for the forensic accounting investigation on the club to be completed.

Moodie would not reveal who would fund the legal action, only saying they were supporters of the Melbourne Storm.

He said the pressure from those who believed in the club had prompted the legal action.

"What I can say is that's why we're here, because so many of the players, members, the supporters, those who work at the club, the Victorian public want a fair hearing and as directors it's our job to fight for that fair hearing," he said.

"Over the last few weeks we've had an increase in our membership, we've had literally hundreds and hundreds of emails asking us to act on behalf of a fair go."

In the writ, the directors allege that before meeting with Storm representatives, Gallop had already decided that the club had breached the cap and the penalties that he would impose.

They claim Gallop also breached rules by not issuing a breach notice and the proposed penalty, or specifying a period for the club to respond in writing.

Gallop countered: "The Storm chose to accept the penalty on the day and their acceptance was an important part of the process that governed the events of the day.

"It was a decision that should have avoided further unnecessary pain for players and fans alike."

Moodie said the directors would abide by the outcome of any "fair, impartial and transparent process".

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