Question
In 2025, the sport of Glow Soccer (soccer played on dark pitches with balls that glow in the dark) becomes immensely popularity around the world.
In 2025, the sport of Glow Soccer (soccer played on dark pitches with balls that glow in the dark) becomes immensely popularity around the world. International tournaments are well- attended. In Australia, the sport is still growing. However, two Glow Soccer clubs have been firmly established, and their teams have already been invited to play overseas: the Western Australian Glow Soccer Club ('WA Club') (incorporated under the Associations Incorporation Act 2015 (WA)) and the Glow Soccer Club of South Australia ('SA Club') (newly incorporated under the Associations Incorporation Act 1985 (SA); it has not yet engaged in any activities since incorporation). Each club boasts of more than 50 members. Members of the WA and SA clubs often attend primary and secondary schools to promote the sport as a great form of exercise and team-building. The members are not paid for these visits. The WA and SA Clubs have been holding 'state of origin' style soccer matches around Australia every three months since mid-2024. The WA Club organises and promotes these matches. Ticket sales to the matches, and sporting merchandise sales, have been generating income for the WA and SA Clubs. The Victorian Glow Soccer Club ('Victorian Club') and the Tasmanian Glow Soccer Club ('Tas Club') (neither are incorporated) are community clubs (with around 15 members so far) that have been hoping to join in the competition with the WA and SA Clubs. Unfortunately, the WA and SA Clubs have refused to allow the new clubs to join. They fear that it will harm their profits, which they have an understanding to share equally between them. This is known as cartel behaviour. The WA Club is currently in talks with a number of potential sponsors, which it knows will only further increase the profitability of the sport. The Australian Government can see the potential in developing Glow Soccer in Australia as a national sport, in a similar vein to the National Rugby League or the Australia Football League. However, the anti-competitive tactics of the WA and SA Clubs is hampering this goal. The Commonwealth Parliament believes that it has the power under s 51 (xx) of the Australian Constitution (the 'corporations power') to insert the following into the Corporations Act 2001 (Cth): Part 2AA Incorporation of Associations and Clubs 1 Application to Register as an Association (1) An application for registration of an association or club may be made to the Secretary on behalf of an unincorporated body having 5 or more members. 5 2 Incorporation of Associations and Clubs (1) An association becomes a body corporate when it is registered under this Act. 3 Corporations Subject to Competition and Consumer Act (1) A corporation, whether incorporated under this Act or under any other Australian law, shall be subject to the Competition and Consumer Act. The Competition and Consumer Act 2010 (Cth) ('Competition and Consumer Act') applies to corporations that meet the definition of a corporation in s 4 of the Competition and Consumer Act: 4 corporation means a body corporate that: (a) is a foreign corporation; (b) is a trading corporation formed within the limits of Australia or is a financial corporation so formed; Relevantly, the Competition and Consumer Act also provides: 45 Contracts, Arrangements or Understandings that Restrict Dealings or Affect Competition (2) A corporation shall not: (a) make a contract or arrangement, or arrive at an understanding, if: (ii) a provision of the proposed contract, arrangement or understanding has the purpose, or would have or be likely to have the effect, of substantially lessening competition; Note that Section 44ZZRF of the Competition and Consumer Act makes a breach of s 45 an indictable offence punishable by a large fine (either as a set figure or as a share of profits). The Australian Government then announces that new or emerging Glow Soccer clubs should incorporate under the newly amended Corporations Act so that they may benefit from available protections under the Competition and Consumer Act, to encourage competition and further grow the sport. The Victorian Club and Tas Club come to you and ask your advice. They want to know: (1) Whether the corporations power in s 51(xx) of the Commonwealth Constitution would support their incorporation under the Corporations Act; and (2) Whether the Competition and Consumer Act applies to the WA and SA Clubs by virtue of them being 'constitutional corporations' for the purposes of s 51(xx) of the Commonwealth Constitution.
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