Righting the wrong: could a class action against the sports rort deliver justice?

Well, as Crikey predicted, Agricultural Minister Bridget McKenzie isn’t likely to face consequences from within her party for doling out $100 million worth of sports community grants to organisations in seats likely to swing Liberal. She has Scott Morrison’s support and has rejected calls to resign. 

But repercussions may come from outside the government, with Slater and Gordon Lawyers announcing it is investigating a class action over the sports rort.

So just what would such a case look like?  

A one-of-a-kind class action

As it turns out, the entire sports grants program may be unconstitutional. Constitutional law expert Professor Anne Twomey has warned that the federal government lacks the power to hand out money to sports clubs. 

The Australian National Audit Office further found in its report into the rorts that McKenzie acted without legal authority, as only Sports Australia was permitted to approve the grant — not the minister.

Leading Slater Gordon’s class action investigation is practise group leader Andrew Baker, who told Crikey the case is potentially “unique”: his firm hopes to cover “several hundred” groups which missed out on funding.

“Any class action we pursue would be intended to cover all such groups, with the intention of putting them in the position they would have been in had the correct process been followed,” Baker said. If it goes ahead, the case is likely to be held in the Federal Court. 

Baker added that without a class action, most sports groups would be reluctant to fight the government as it would affect the possibility of future grants.

“The best-case scenario is that the groups that would have been funded under Sport Australia’s assessments are given the funds that they were originally recommended to receive,” Baker said. 

The stated aim of the grants program is to increase community participation in sport and physical activity.

But, as was revealed yesterday, McKenzie apparently determined that places like the Tea Tree Gully Golf Club — which plans to build a new foyer and install a lift to make the place more appealing as a wedding venue — was apparently more deserving of funding than, for example, the Coledale Waves Football Club — which is used by 1200 players each week and is in dire need of a new change room. 

“Every dollar that went to a club whose application should have been unsuccessful is a dollar that didn’t end up with a club that Sport Australia had identified and recommended for funding in the course of proper processes,” Baker said in a Slater and Gordon media release.

“These community organisations, clubs and groups have lost out because it appears public funds were used for political gain.”

Maurice Blackburn principal lawyer Josh Bornstein has also offered to work pro bono for clubs that were denied funding. 

Any lawsuit would be long, painful and unprecedented 

Marque Lawyers managing partner Michael Bradley said he couldn’t think of any similar class actions. “It’s a new one … it’s unprecedented in terms of the concept and would involve some pretty novel legal arguments,” he said.

With the government looking at the rort from a political perspective and focusing on larger legal issues, Bradley predicted the class action was “pretty unlikely to get off the ground … the government would mitigate against the likelihood of it really going ahead”. 

But, he predicted, organisations screwed over by the rort could try to claim the money they would have been granted, or what it cost them to apply. (Coledale Waves said it spent more than 100 hours preparing its application.) 

“They could claim they were the victims of some sort of fraud or misrepresentation, or that it was a breach of contract and they were lied to,” Bradley said, adding that a case like this could drag on for years.

While any hopes for accountability and justice is likely to be drawn out and complicated, the Liberal government may be starting to learn that sometimes there are consequences for actions — and it only takes one novelty cheque to throw you under the bus.